𝐓𝐗𝐌𝐂
𝐓𝐗𝐌𝐂|Aug 23, 2026 16:31
China cannot offer the same benefits of participation in *their* side of the global divorce as the U.S. can. This is very important to understand. The U.S. package includes: access to an enormous consumer market, the ability to run export surpluses against that market, a huge liquid financial ecosystem in which to invest the resulting revenue surpluses, relatively free movement of capital, a widely accepted currency, comparatively strong property/contract protections, and security guarantees and military integration (for allies). China can replicate individual pieces of that package. It cannot replicate the entire thing. In 2025, Canada sent almost 72% of its merchandise exports to the United States. China is a production-driven economy with weak private investment and weak demand. They run a gargantuan trade surplus. They are not positioned to start absorbing the surpluses of other trading partners the way the U.S. can. China can offer aid in building infrastructure, cheap manufactured goods, commodity purchase agreements, financing, etc, but those are more appealing for emerging economies rather than a large developed nation with plenty of its own capital that needs CUSTOMERS for the output of its high-income economy. China wants other countries to absorb Chinese production without China necessarily absorbing equivalent amounts of theirs. Doing more trade with China and less with the U.S. would also mean accumulating greater RMB balances which are far more difficult to invest with the same freedom, liquidity, and wide acceptance as dollar balances. China also controls their capital account and limits cross-border flows. These are substantive obstacles to ditching America for the Chinese. What they can offer is substantially different, and those differences are everything.(𝐓𝐗𝐌𝐂)
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