China's Economic Crisis
- Communist China is experiencing its worst economic crisis ever, which the regime will not recover from.
- Key issues include a real estate crisis, a banking crisis, youth unemployment crisis, and concerns over the current account.
- U. S. tariffs and reduced trade are challenging China's economic advantage: its trade surplus with the U. S.
- China’s exports to the U. S. declined by 35% in May year-on-year.
- Capital flight is affecting China significantly, with a $500 billion outflow of foreign investments in 2024.
- There is a significant debt issue, with a projected debt-to-GDP ratio of about 350%.
- China's bond market reveals economic trouble, with a notable yield difference compared to U. S. bonds.
- Economic issues have persisted since the collapse of major developers like Evergrande and Country Garden in 2021.
- Unemployment rate reached a two-year high of 5. 7%, with youth unemployment at 16. 9%.
- Consumer prices fell for the fourth month in a row, and industrial profits decreased by 9. 1% compared to the previous year.
U. S. -China Relations
- The U. S. relies on China for certain imports, like rare earths and pharmaceutical ingredients.
- The U. S. imported 70% of its rare earths from China between 2020-2023.
- The U. S. has control over the global dollar system, providing leverage against China's currency.
- The U. S. should negotiate severing China's access to the dollar if China takes military action against Taiwan.
Taiwan Issue
- The Chinese Communist Party (CCP) considers Taiwan a renegade province but it operates as a de facto independent nation.
- U. S. Defense Secretary warned about China's military preparation to invade Taiwan by 2027.
- Any military move by China against Taiwan could have severe consequences globally.
- Recent U. S. military actions against Iran have made China reconsider its military stance.
- Securing Taiwan is vital for U. S. national security and preventing China from expanding its power projection.
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