- China's exports rose 25% in annualised terms last month, swelling the trade surplus to US$119 billion and putting the country on track to exceed last year's record US$1.2 trillion.
- China's surplus with the US rose 44% to US$29 billion, the widest gap since Trump returned to the White House.
- Beijing's weaponisation of rare earths demonstrated the power to severely disrupt the global economy, giving China leverage in the trade war.
- The US still accounts for almost two-thirds of MSCI All-Country World Index market capitalisation and 40% of the global bond market, and the dollar remains the pre-eminent reserve currency.
- A sharp reappraisal of US debt and dollar risks against rising resilience in Chinese markets leaves the financial-market scoreline far less clear-cut than the trade scoreline.
Quotes
“When it comes to the trade war, China “has the cards”, as Trump likes to say.”
“Against the rising resilience of Chinese markets, the sharp reappraisal of US debt and dollar risks makes the answer far from clear-cut”