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As Trump odds rise, China’s economic dominance is beginning to wane

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Republicans celebrate as Donald Trump picks JD Vance as his running mate at the Republican National Convention in Milwaukee on Monday, July 15, 2024 (Photo by Kiira Turnbow)

A Chinese media outlet, the South China Morning Post, reported Wednesday that China is preparing to “batten down the hatches” after the assassination attempt on former President Donald Trump appears to have increased his chances of winning the 2024 presidential election.

Global markets instantly were stimulated after Trump survived the assassination attempt by Thomas Crooks at a Butler County rally in Pennsylvania on Saturday. Cryptocurrency, gun stocks, and Trump’s own Truth Social stock all saw a significant jump in value.

During his first term, Trump famously imposed import tariffs of up to 25% on billions of dollars worth of Chinese goods, a number Trump has promised to bump up to 60% if he is elected in November.

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A researcher with the China Institutes of Contemporary International Relations, Chen Fengying, told the South China Morning Post that while there is a burgeoning trade war on the horizon, China is already working on plans to adapt if Trump once again takes the Oval Office.

“Another trade war seems inevitable…It seems we are already adapting gradually…We have been digesting the tariffs through supply chain relocation – there is no other way,” Chen told the publication.

Since the tariffs were imposed by the Trump administration in 2018, China has been forced elsewhere to do business, branching into markets like the Middle East. The formation of BRICS – the multinational alliance where China sits as one of the top players, has also helped China keep afloat as it dealt with U.S. tariffs.

However, the Chinese economy does not appear to be as strong as the Chinese Communist Party would have the world believe, as new reports are emerging abpout its stagnation – despite the country’s exploitation of slave labor.

Strict lockdowns and restrictions of its 1.4 billion population during the COVID-19 pandemic, as well as strict tariffs from the U.S., already had put a dent in the Chinese economy. Regulatory crackdowns, a property crisis, and youth unemployment is further compounding this, according to a report from CNN.

Time reported in August 2023 that China’s economy was already beginning to slow, with global investors pulling over $10 billion from the Chinese stock markets. Goldman Sachs Group Inc., and Morgan Stanley also slashed their targets for Chinese equities.

Time further reported the slowdown of China’s economy would be a positive for the U.S., because it would “drag down” oil prices, and deflation in China would mean lower prices on the country’s exports.

Fast forward to this week, when CNBC reported that China’s second-quarter growth was less than expected, sitting at a growth rate of 4.7%. This had steeply declined from the year’s first-quarter of 5.3%.

The National Bureau of Statistics of China said in a statement the demand for domestic goods in China is insufficient and recovery needs to be strengthened.

“In the first half year, the national economic performance maintained stable with steady progress made in the transformation and upgrading. However, we should be aware that the external environment is intertwined and complex, the domestic effective demand remains insufficient and the foundation for sound economic recovery and growth still needs to be strengthened,” the statement says.

A look at China’s debt clock, shows the Chinese economy is almost $10 trillion in debt. This number, however, excludes local government financing and China’s shadow banking institutions. It is suggested this number should be multiplied by at least 3.25, meaning China’s real debt would exceed $30 trillion.

China has some other deepening problems, as violent crime seems to be on the rise after a spate of stabbings across the country have made headlines – including a group of American Cornell College professors who were attacked by a 55–year–old man in a park in Jilin City in June.

Chinese President Xi Jinping has hailed China as one of the “safest nations.”

Trump trade: Assassination attempt boosts global financial markets

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