In case you haven’t noticed, global sentiment around China is in the shitter. Even in Africa.
As global demand collapses, and supply chains diversify, China is going to have a lot less of that money. Its foreign reserves are dwarfed by its debt, and it doesn’t have a reserve currency.
Riiiiiight, Palestine and China are, like, so comparable. 
[/sarcasm]
So really the money move for China is to become a democracy and take America’s place as the leader of the free world. The US instead will be run by right wing militia who will reenslave the black man in humongous labor camps roughly analogous to those in Xinjiang. Up is down, black is white, two plus two equals 45.
Re-recognize the Republic of…? 
(Yes, three whole minutes. Pure gold!)
“I have to have my China” 
Global sentiment about the US isn’t much better to be honest. Also, even if supply chains diversify, which is a added cost forced on the corporations and smaller factory operators, China still has huge internal demands that can sustain its own industries at this point, even after the pandemic is over.
The harder this pandemic hits the US, the more level the playing field China would enjoy post pandemic.
It sounds like Shina after hearing it for 3 minutes. It almost doesn’t sound like a word after watching that.
I’d love to see a citation for that. Certainly, Trump hasn’t done the US any favors, but I think you’re overestimating how much damage he’s done in the places where it hurts economically. The action of the dollar speaks for itself.
On that note, since we’re in Taiwan…
Despite the fact that China is trying to diversify its economy and move up the value chain, it’s still an export-driven economy and internal demand is still fueled by the profits from external demand. As China’s export-driven economy weakens, internal demand weakens.
Just look at auto sales in China. A significant downward trend was in place even before coronavirus because China’s economy has been gradually weakening for some time.
You also need to factor the value of the yuan, and the cost to China of trying to maintain its peg to the dollar, into all of this.
No. Economic weakness in the US (and Europe) hurts China. Period.
And you’re also failing to see that the US has an inherent structural advantage over China because it has the dollar. China needs dollars.
This is why China is so worried about an economic backlash and trying to stoke nationalism.
I believe we’re seeing the start of a new cold war, and potentially the foundations of a hot war. The problem for China is that it unleashed its flu on the world a bit too early. It’s not yet in a position to win a war with the US.
And as we speak, the US is printing tons of money just to prop itself up and act as everything is the same as usual. How long can the dollar be viewed as being worth its value as the lockdown and money printing continues?
It’s mind boggling that a piece of paper can roll off the printing press so fast and created out of thin air but still be considered of value. (Insert J. Powell printer go BRRR meme) it goes to show the power of the states that people want that currency devalued or not.
The line of people who have been predicting the death of the dollar for years is long.
How long can the dollar be viewed as being worth its value as the lockdown and money printing continues? I don’t have the answer to that. I can only look at market action at any given time, which speaks for itself.
You should consider the possibility that the dollar’s supremacy comes down to the fact that there’s no better alternative. The EU has even more structural problems than the US. Japan is a zombie. Who trusts China? Russia is a joke.
The reason its not devaluing is that other countries are also printing a ton of money. It also always devalues a little bit after the downturn ends.
Yeah, that used to seem like some permanent rule, but Trump is turning the US into a joke.
I sometimes shudder at the thought that Trump might decide this crisis is a good way for him to secure his position as the president forever. He thinks of the pandemic as a war when it suits him, and claims it’s no worse than the flu and we should reopen the economy otherwise. If Roosevelt can serve multiple terms during WW2, what’s to stop him from doing it?
Humble suggestion: you’re focusing too much on Trump.
But you’re free to short the dollar. I’d just warn you that a lot of the people standing in that line of dollar doomsayers are broke.
Perhaps, but there’s nothing on in the rules that says he can’t. The only thing stopping Trump would be him finding the position too tedious to deal with. He does love his rallies though.
The US had always been the largest economy when the dollars’ position was challenged in the past. That isn’t the same this time around. I’m not suggesting something could replace the dollar’s position, but the dollar might not stay in its current position, especially if the US continues to bungle its handling of this pandemic.
Would a recognition by the Trump administration cause an immediate invasion from the CCP? They would lose all the face they had left if they sat idly by and watched Taiwan get legitimized by the West. No amount of sanctions or money would be worth that amount of face loss.
Having said that, it would more than likely cause WW3. I do think the US has a defense pact with Taiwan therefore an invasion would cause a counterattack which would cause other Asian countries to get involved, mainly India and Japan and then boom, NK launches a nuke and we all die.
It is feasible that Sec of State or POTUS or VP visit Taiwan to attend a religious gathering, or a national holiday. Frankly they can come and go almost anywhere in the world and be well received. Washington Post or NY Times cannot blame Trump admin for visiting Taiwan, whereas they would certainly pay a lot of writers columnists to write negative articles if Taiwan’s President were to visit DC.
I don’t think US will “switch recognition”. The phrase implies US is still bothered by which government is the legitimate representative of China. It’s so 1970s.
However, if China wants to de-recognize US, by all means please.
Still at least we’d teach that coronavirus a lesson. Coming over here, stealing our old folk.
The dollar is acting the same way it has in the past. The vast majority of the world’s trade and financing are conducted in dollars, and the currency is a safe-haven in times of uncertainty.
This said, anything is possible. An asteroid on a collision course with earth could be discovered tomorrow and 2020 would be complete. But you still haven’t explained precisely how your hypothetical scenario leaves China in a better position post-pandemic.