Recently, it was reported that China and the US have set up economic working groups, including economic working groups and financial working groups, headed by vice-ministerial officials from both sides. The news came as a surprise. According to sources, this was done during Yellen's visit to China.
So what does this mean? I think this issue should be looked at from two levels. The first step is to finally end the rivalry between China and the United States. The second level is a turning point in the Sino-American currency war.
In recent months, China and the United States have engaged in a fierce competition in the financial sector. The US is aggressive and shows its intention to fight to the death with China. Financial instruments and media were used to stimulate the Chinese economy, promote decentralization and deregulation, and force foreign investment out. These practices have created serious problems for China. The continued depreciation of the renminbi has led to a sharp decline in GDP in dollar terms compared with last year. .
As a result, China's economy is growing slowly, foreign trade is falling, consumption is falling, and the property market continues to boom. At the same time, the United States was suffering, with unstoppable inflation, high interest rates, bank failures, and mass strikes.
All of this represents a brutal financial war between China and the United States. Of course, China is not being defeated in secret. China's countermeasures include further reducing its holdings of US Treasuries and pushing for de-dollarization around the world. One bright spot in science and technology is Huawei's research and development of mobile chips, which makes the United States' resource-consuming blockade system a joke.
In addition, China's exports to the Belt and Road exceeded those of Europe, the United States and Japan for the first time, making foreign trade less threatened than that of Europe and the United States. So even if the trade war is a lost product, China is clearly calmer.
As China gradually breaks down American barriers, the United States also realizes that it must adjust its strategy and engage in more aggressive confrontation. So we can see that from Blinken's visit to Kerry, Yellen and Raimundo, the series of visits to China all show the willingness of the United States to adjust its relations with China.
Therefore, the trade war between China and the United States must also be reduced. That is why China and the United States have set up an economic working group. What is the role of these two groups? We know that US financial and industrial policy is based solely on its own interests, without regard for the feelings of other countries.
The main responsibility of the two working groups is that the United States must consult China and consider China's interests when formulating various financial and industrial policies in the future. In the past, this would have been unthinkable, but in this particular period, the United States has actually agreed.
There are other things that attest to this fact. China has announced that it will no longer restrict foreign direct investment, in line with trials in Beijing and Shanghai. There are many interpretations of the work. I personally think this is the first product of these two working groups. And this product guarantees America.
Some netizens may say that China has clearly relaxed foreign exchange control, how can you say that the United States has relaxed? You know, divestment is not a derogatory term. The key depends on the situation and timing of both parties. In the past, the United States tried everything, so China had to defend its borders from the wave of foreign investment. But now, objectively, the dollar rate hike has peaked, and the Fed has raised interest rates again.
After that, the dollar will enter another cycle of weakness. It's time to cast the net. From the normative point of view, China has a mechanism to pressure the US monetary policy, and is fully aware of the risks, so it boldly introduced this policy. In the past, the United States never allowed China to take advantage, but now the United States has to compromise. This result confirms the outcome of the rivalry between China and the United States. This is the price we offered the United States, and the United States accepted it for the time being.
Of course, we should not assume that China can jump out of the sea. Once the United States calm down, the possibility of war between the two sides is very high. But the bottom line has been set, and we have a full understanding of the strengths of both sides. Understood. In the future, the situation will develop in China's favor. This is a potential event.