Why is China buying and storing metals and grains? Its war economy – Corriere.it

The super-expert on commodities, Gianclaudio Torlizzi, frames it as a war economy strategy. The crisis in Taiwan, with the state visit of the Speaker of the House, Nancy Pelosi branded as a provocation by Beijing, triggers yet another short circuit with Washington. A relationship already severely tested by reciprocal duties and bans for the use of telecommunications equipment. This time, however, something unusual is happening. A trend that has been going on for almost a year. Which suggests a profound change in strategy by Xi Jinping. Because it inaugurates (and consolidates) a process of decoupling of the economies between East and West of the world sharpened by the war in Ukraine.

If Moscow is sliding towards the Chinese sphere of influence one cannot fail to notice that Beijing is preparing to break the global balance of raw materials by purchasing and storing metals and grains as never before in recent history. Torlizzi writes that the continuous process of re-stocking of raw materials by Beijing, together with the maintenance of a stringent Zero Covid, represent a clear sign of a war attitude on the part of the Chinese regime. To date, China holds 93% of the world stocks of copper, 74% of those of aluminum, 68% of those of corn and 51% of those of wheat. Conversely, the level of inventories in Europe and the USA remains very low. In recent weeks, copper imports by the Celestial Empire have returned to growth despite a marked slowdown in the economy in recent months due to the government’s crackdown on the real estate sector.

Torlizzi adds a series of reflections that open up different scenarios. None of these idyllic. It is certainly reasonable to expect a series of reprisals, also of a commercial nature, from Beijing. Actions presumably coordinated with Moscow. The first sign in this sense could come from Beijing’s refusal to adhere to the G7 proposal for a price cap on the price of crude oil. If the Chinese government decides to reject the G7 proposal, the oil price control power of the measure would be deeply watered down, also in consideration of the fact that, following Beijing’s refusal, New Delhi would do the same. And without China and India, among the major buyers of Russian oil in these months, the profitability of the price cap would be very low as it would push up crude oil prices in the West, increase the discount paid by Chinese and Indian buyers and favor flow. of Russian oil to Asia.

Centralized European purchases of rare metals should be considered. And to build commercial alliances with South America. Only Bolivia has deposits of barite, bismuth, bentonite, boric acid, cement, copper, gold, gypsum, rock salt and tantalum. But the American strategy seems to be in hiding at the moment. As early as last October, Beijing had begun to stock up on corn, causing the price of wheat futures traded on the Chicago Stock Exchange to rise. If there is a country in the world that begins to buy raw materials without restraint, the price inevitably rises according to the most elementary dynamics between supply and demand. If China, which has economies of scale, investment opportunities and sufficient internal demand (over 1.3 billion people), does so, then that market is earthquake like never before. The main producer in the world, as it happens, Ukraine, which probably was an unaware supplier, not imagining what would happen only a few months later.

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Videogames entered his life in the late '80s, at the time of the first meeting with Super Mario Bros, and even today they make it a permanent part, after almost 30 years. Pros and defects: he manages to finish Super Mario Bros in less than 5 minutes but he has never finished Final Fight with a credit ... he's still trying.

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