Building resiliency, in part by reducing the US economy’s dependence on China, is a recurring theme here at Global Macro Update. I see it as essential to strengthening our long-term economic and national security.
China is doing the same thing—decoupling its economy from ours. Yet China’s export business is booming. In a new interview with my friend Louis Gave, he says that China now exports more to other emerging markets than it does to the US and western Europe. Here’s Louis:
China's trade is absolutely booming. The investments that China made 10 years ago in things like the One Belt One Road, the Silk Road Fund, the Asian Infrastructure Investment Bank, all the things that we laughed at and said, "Oh, you want to have trade with Kazakhstan? Who cares? Sure, have it. It's all yours." The reality is, if you look at the BRICS countries, China now does more trade with the BRICS countries than it does with the United States.
Most of you know Louis’s work. He is a founding partner and the CEO of Gavekal and a respected expert on China. He’s also a long-time favorite at our Strategic Investment Conference.
In our interview, Louis explains the mechanics of how China subsidizes various industries, such as vehicles (where it suddenly dominates the global market). He notes that in some ways, China might be more capitalistic than the US, which essentially stopped allowing companies to fail after the 2008/2009 financial crisis.
You will also hear about France’s splintered political climate, why China’s struggling stock market isn’t a bigger problem for China as a whole, and Louis’s outlook on global commodities like oil.
Watch my interview with Louis Gave by clicking the image above. A full transcript of our conversation is available here.
Thanks for reading and watching.
