China has never produced so much. Factories at record levels, exports exploding.
But there's a problem: what once propelled the world may now be suffocating the global economy.
The reversal no one saw
Until recently, Chinese growth was synonymous with heated global demand.
When China grew, it bought more from all over the world – commodities, machinery, technology.
Now the game has changed.
By 2025, China will have accumulated a US$1.1 trillion trade surplus. Meanwhile, it has reduced imports by 3% and aggressively expanded exports.
The result?
It is capturing market share and displacing production from countries like Mexico and South Korea.
Xi Jinping's strategy prioritizes self-sufficiency and industrial dominance – from simple manufacturing to semiconductors and AI.
Devalued currency, cheap energy, idle capacity being exported at low prices.
This puts pressure on margins globally and redefines production chains.
While the US increased imports by 10% and boosted global demand, China is doing the opposite: producing more, buying less, and displacing competitors.
What to expect going forward:
- Trade tensions are expected to intensify
- Countries will try to react with barriers, but will face retaliation in critical supply chains
- Consumers benefit from low prices, but global industries suffer
- Metal commodities (especially copper) may benefit from the AI dispute
The question is: do your investments benefit or are they harmed in this context?