Unite for literacy app1/9/2024 ![]() ![]() In retrospect that was crucial to what has become of the two nations, at least as measured by the two stock markets. The hardline had gotten harder and with it new jobs coming from the U.S. ![]() New plants seemed and became out of the question, something in retrospect probably seemed unlikely when Biden replaced Trump. The one country status that we had tacitly accepted ended – and with it any hope of economic connection with China save Nike and Club names Apple (AAPL) and Starbucks (SBUX), plus existing plants by some multinationals. It signaled that not only was it no longer business as usual but that our nation was going to cease tolerating any designs on Taiwan even as China was unwilling to acknowledge that our policy had changed when Pelosi visited. That break proved crucial to the geopolitical strategies of both countries. Given that we had pretty much ceded the making of our best chips to TSMC, the threat was real and nefarious, meant to drive home plans for a one-country strategy, a strategy never abandoned by China and one that had been sub rosa accepted unchallenged until August 2022 when then-House Speaker Nancy Pelosi (D-Calif.) visited the country. There were really three reasons: (1) the Chinese no longer attempted to change their rapacious ways with American industry (2) their foreign policy plans were unwavering in their insistence of domination of the lesser developed world via the Belt and Road Initiative and (3) three their military, always the power behind the throne, decided to go toe-to-toe with the United States by appropriating the most sophisticated semiconductor chips while beginning a policy of intimidation of Taiwan in order to force Taiwan Semiconductor Manufacturing Company, the largest chip foundry, or factory, in the world, to favor the makers of Chinese chips. China could not be counted on as a reliable trading partner. Our continual building of factories and expansion together had failed to make for a level playing field. We didn't know it at the time but it wasn't Trump's tariffs as much as his admonitions that it was time to break with cooperation because it had been one-sided. President Donald Trump began, and phase two when current President Joe Biden continued, if not accelerated, the economic separation between our two countries. ![]() In retrospect, that was the beginning of phase two of the slowdown in China, phase one being when then-U.S. ![]() The country adopted a strict Covid policy that prevailed through 2022 causing its GDP to fall to 3% way below the Chinese government's 5.5% target. gross domestic product (GDP) grew 2.1% in 2022, a decent rate all considering. (Including the March hike, central bankers increased the fed funds overnight bank lending rate 10 more times to the current range of 5.25% to 5.50%.) U.S. ended its tough restrictions on Covid in the spring of 2022, right about the time the Fed began the most aggressive tightening cycle in its history. He waited four months to be sure before taking rates in March 2022 up to a range 0.25% to 0.50%, a shrewd decision, in retrospect, because at that point Omicron had played out and the crippling impact had run its course. Yet, the Fed chief was roundly criticized for avoiding tightening because the economy wouldn't slow down nor would inflation. Would it shut down the economy again? Would it be more restrictive, causing the country to revert to the closing of all stores except those designated with emergency status, something that was simply wiping out all shops with stretched balance sheets? Who knew? The thing moved so fast that the last thing Powell could do was raise rates. Fed Chairman Jerome Powell, though, couldn't be sure how badly the Covid variant would slow the economy because he had no idea how viral the new strain would be. The Federal Reserve had been keeping interest rates ultra-low, but it wanted to begin a monetary tightening cycle. Two years ago, the Omicron scourge hit the U.S. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit ![]()
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