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ffr

(22,644 posts)
Mon Jan 23, 2017, 04:41 PM Jan 2017

China (CIC), licking its chops at misguided tRump infrastructure funding and more. Look out!

Will Trump hop on an American Silk Road?
If it's a trade war with China he would rather have, the new president will find himself on the back foot from day one

<snip>

Ma said, “In the past 30 years, companies like IBM, Cisco and Microsoft made tons of money.” The problem was how the US spent the wealth: “In the past 30 years, America has had 13 wars at a cost of US$14.2 trillion.” So what if the US “had spent part of that money on building up their infrastructure, helping white-collar and blue-collar workers? You’re supposed to spend money on your own people. It’s not that other countries steal American jobs. It is your strategy – that you did not distribute the money in a proper way.”

In the meantime, something quite extraordinary happened at the Asian Financial Forum in Hong Kong, one day before Xi’s Davos speech. China Investment Corporation (CIC) chairman Ding Xuedong, referring to Trump’s much-vaunted US$1 trillion infrastructure building plan, said that created fabulous investment opportunities for China and his US$800 billion sovereign fund.

According to Ding, Washington will need at least an astonishing US$8 trillion to fund the infrastructure spectacular. Federal government and US private investors are not enough: “They have to rely on foreign investors.” And CIC is ready for it – focusing already on “alternative investments in the US”.

Assuming the Trump administration welcomes CIC, and that’s a major “if”, it will be a slow start. Only US$80 billion of CIC’s overseas investments are currently held in US government debt. A massive national security/antitrust controversy will be inevitable. And yet, if successful, the move could be a win-win towards an American Silk Road.
<snip>

In case of a major rift, Beijing would not be inclined to dump US Treasury bonds en masse; that’s not exactly a win-win for Chinese reserves.

The US has way more foreign direct investment (FDI) in China than vice-versa, so it’s easy to see who would be on the losing end. At the same time, Chinese businesses could profit from more tax breaks and invest in upgrading their production lines. The break down: China’s enormous savings funding the next step of industrial investment – especially as seven million college graduates hit the market each year. Now that’s a win-win.

Any trade war projection leads to the same results: depressed US consumption, less economic growth, and more unemployment – particularly among the rust belt/ “basket of deplorables” axis. - Asian Times

..."more unemployment – PARTICULARLY AMOUNG THE RUST BELT/"BASKET OF DEPLORABLES" AXIS"
Schadenfreude of me to find humor in Joe and Jane Hoodwink's misfortune, but they get what they deserve for being so selfish and foolish with their votes.

Hang onto your butts! The tRump economic rollercoaster is starting its descent.
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China (CIC), licking its chops at misguided tRump infrastructure funding and more. Look out! (Original Post) ffr Jan 2017 OP
is China going to ask bdamomma Jan 2017 #1
Not according to the article. Doing so would hurt them equally. ffr Jan 2017 #2

ffr

(22,644 posts)
2. Not according to the article. Doing so would hurt them equally.
Mon Jan 23, 2017, 04:54 PM
Jan 2017

No, for China, it seems they like tRump's simplistic performance. They're playing him. Let him do the work and once congress goes along with these unfunded infrastructure bills, the CIC will swoop in for the deal, placing more leverage to get what China wants from the U.S. By the sound of it, they're two steps ahead of us already.

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