China wants the World to know “IT’S BACK !”
OPENING UP in the Wake of Covid and Buying Immense amounts of LNG under Long Term Contracts and Buying Crude Oil on World Markets…this moved the Brent World price from $80 to $86 Bbl…US West Tex Int from $72 to $80 Bbl .. reversing the slump in prices as western G7 Economic activity is projected to weaken towards recession and less oil consumption…
We see China’s Aggressive “Opening Up” as a response to a Host of policy failures affecting China…after the CPC’s humiliating Retreat from Zero Covid lock-downs, Demonstrations, not seen since before Tiananmen Square Crackdown…massacre… These protests embarrassingly, frighteningly, morphed into Anti Xi and even anti-CPC protests against the decline of living standards during China’s Current Economic slump, with sinking employment, a brutal surveillance state, and a bleeding real estate sector.
This is a Hail Mary play, or maybe the only possible policy to quickly mend a Lot of broken fences… to convince international investors to return; who until only very recently were hounded out of the country as foreign shares of Joint Ventures were expropriated over the past several years…Others asked reconsider their plans to relocate manufacturing supply chains out of China into ANYWHERE Else (think Apple…)… Away from China’s current intimidating Militarism, …Wolf Warrior Diplomacy… against literally every country sharing a border.
China has now squandered any appearance of its earlier “Peaceful Rise” to that of a satisfied great-power country after the past years of brazen economic and international aggression and we don’t think this policy shift of OPENING BACK UP after Covid will be sufficient to plug the leaks from VERY serious economic concerns to taming the BEAST of the country’s overleveraged real estate sector from collapse, where people’s savings are trapped.
David Rewcastle of Darien, Connecticut, is an Equity and Fixed Income Analyst with a background in Finance and Middle East Studies