Tuesday, January 5, 2016

The China Card

"This giant ship is named the Benjamin Franklin. It was built in France and carries the name of an American hero."

Whether we like it or not, we are joined at the hip with China. And we have been for a while. The picture I posted for this article is a megaship. In fact the world's largest cargo ship, which pulled into the Port of Los Angeles last month. Where did it come from with that gargantuan cargo? China, of course.

To me, this ship symbolizes the world today. This ship is the first what will probably be many giant ships used for shipping from China to the United States. Over the past few years, the need for cargo capacity has grown about 14% for China shipments. In case anyone hasn't noticed it, we get quite a bit of our stuff from China. Like a whole lot of what we use now comes from China.

And because China has become such a super power in manufacturing, whenever they cough or sneeze, the rest of the world catches a cold. Yesterday was a good example of how we are tangled up with China. They had a bad day on their "Wall Street" due to a slowdown in their manufacturing sector. Before our markets could even open, red flags were out. It was going to be a bad day on our "street". Our market opened lower, and for a while it was almost 500 points down.

This is a very strange dance we are having these days with the Chinese. We don't really like each other, but boy do we need each other. The Chinese hold quite a bit of our bloated debt. They are are a huge trading partner. Yet at the same time, we are playing cat and mouse with our militaries in disputed waters. So what are we? Friends, enemies, both, or neither?

My own feelings on China are simple. I have followed this giant country since my Cold War days. The number one asset this country this country had at one time was only its people. A huge population which kept getting bigger. However as China has evolved, so has its technology. They have learned how to build things that others need. Now it is a nation with a large population and the desire for upward mobility. The old Communism has morphed into something that looks more Western than Marxist.

As we go into 2016, I believe China will be one of the stories to keep an eye on. A developing economy as well as a developing blue water navy. As the old Chinese proverb goes (and I will paraphrase), "we now live in interesting times." 

No comments:

Post a Comment