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CHINA HOW STRONG IS CHINA? Business Basics: Don’t Be Surprised by China’s Collapse. India, USA & Mexico's Plan To Checkmate China PLAY YOUTUBE VIDEO Original article: https://www.youtube.com/watch?v=dYLCkuFgKfY Peter Burgess COMMENTARY This material is thought provoking. I know some of the history at a 'schoolboy' level and have enjoyed the additional information from this presentation, including especially the transcript of the conversation. Many of the events described remind me of a variety of friends and aquaintances of my family who were impacted directly by the big events of the day covered in this material. One of my concerns at this time ... May 2024 ... is how little of world history is known by most young people in both the United States and the UK. I cannot speak in respect of young people in other countries, but I expect the issues are somewhat similar ... that is the dominant source of their knowledge is the 'social media' and mobile device ecosystem. Academic research seems to be showing that human brain development is being impacted negatively by these devices at a far greater scale than anyone expected! This video is very long and covers a lot of ground ... I have hopes of splitting the video into several segments to help with a better understanding of the many issues that need addressing with considerable urgency! Peter Burgess
Don’t Be Surprised by China’s Collapse. India, USA & Mexico's Plan To Checkmate China Business Basics 906K subscribers ... 716,396 views Sep 29, 2023 Sign up for FREE Geopolitics Newsletter: https://www.globalrecaps.com/subscribe Why I Blur my Videos (Full Story) • Why I Blur my Videos (Full Story) Sign up for FREE Global News Newsletter: https://rebrand.ly/GlobalRecaps Watch Uncensored videos & Support the channel on Patreon: / businessbasicsyt Facebook: / businessbasics1 Twitter: / businessbasiics Get New Merch: https://www.businessbasics.shop/ Join this channel to get access to perks: / @businessbasicsyt China Military Drills: CCP is Scared About Invading Taiwan ⚠️Webull: 5 x Free Stocks: https://a.webull.com/i/BusinessBasics China's Economy is Dying. India, USA, Mexico, Vietnam Team up Against China . CCP Collapse Happening China vs India, USA, Mexico, Vietnam. CCP Collapse Happening India, USA & Mexico's Plan To Checkmate China By Stealing Manufacturing Don’t Be Surprised by China’s Collapse. India, USA, Mexico, Vietnam team up against China. Mutiny in China: Why CCP Won't Invade Taiwan Investing For Beginners \| Learn Investing (Free Course) • Video Passive Income: How To Retire Early Through Passive Income! • Video How you can focus like Warren Buffett? (2020) • Video some links above are affiliate links All materials in these videos are used for educational purposes and fall within the guidelines of fair use. No copyright infringement intended. If you are or represent the copyright owner of materials used in this video and have a problem with the use of said material, please send me an email, businessbasicsyt@gmail.com , and we can sort it out. DISCLAIMER: All of my investment strategies are based on my own opinions alone and are only done for entertainment purposes. 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Transcript India has launched a war against China and it's not a war that will be fought on the battlefield rather it's a war that will be fought economically India has started emerging as the next great Powerhouse of Asia in order to counter China's aggression New Delhi has now positioned itself as an alternative for companies that are getting tired of being used like a pawn in the ccp's grand ambition towards taking over the world companies like apple are already moving to India to set up for a world after China India has slowly launched its own Global projects to counteract China's growing influence from the Belton Road initiative Prime Minister Modi has started India's own lending program for its neighbors in order to stop China from Gaining influence by using its debt trap diplomacy so today let's go over how India became China's greatest threat the head of MI6 last year accused China of using debt traps to gain leverage over countries Sri Lanka saw China's financial help the country took loans worth 45 billion dollars from various countries including more than 8 billion dollars from China in agreement for a 1 billion US dollar credit line from India fast Patrol vessel will be the fourth ship to be gifted by India to Seychelles Pakistan is all set to receive a 700 million loan from China to help ensure its foreign exchange results which are at a 10-year low this video took a lot of effort recently my videos have been getting age restricted which severely hurts their reach with the algorithm and doesn't really make that much sense so if you guys can please take a second and hit the like button below it will help me out a lot thank you so let's start from the beginning something that might surprise most of you is the fact that historically India and China were strong allies and friendly economic Partners the Silk Road linked the cities of Xi'an in China and petaloputra in India trade on the tea and Horse Road as the Chinese called it was a significant factor in the growth of Chinese and Indian civilizations coming into modern history both civilizations had their hands full with their colonizers as India had the British and China had the Japanese that didn't stop their leaders from supporting each other even under British rule Indian leaders publicly showed their support for China's struggles against the Japanese in 1939 future Prime Minister of India joaharlal nehru visited China as an honored guest of the government both countries actually helped each other in their battles India helped China against the Japanese and Western imperialism and in return China supported India's independence movement against the British then in 1947 India gained its independence from the British Empire and two years later in 1949 the People's Republic of China or PRC came into power in China this is where the relationship could have soured up to this point Indian leaders had been friendly with the ROC the Republic of China when Mao zedong's PRC came into Power The ROC fled mainland China and took over Taiwan I'm sure you guys are already familiar with the China Taiwan issue so I won't go into it right now but good relations between the two Nations continued even under new leadership in fact India was one of the first countries in the world to recognize the People's Republic of China as the official government of China Indian Prime Minister jawaharlal nehru also became the first foreign leader to visit the PRC in China in 1954. this time to meet with the PRC leader Mao Zedong nehru described the visit as the most important foreign mission of his life he considered India and China to be very similar he believed as a newly Free Nation they couldn't trust the West they needed to depend on each other to grow their economy and improve living conditions for their citizens they jointly signed and advocated for the five principles of peaceful coexistence but peace it didn't last long as soon as the CCP came into power in 1950 they forcibly took over the autonomous region of Tibet by sending loads of military personnel I have a full video on the story which was actually demonetized and restricted by YouTube the first time I uploaded it good times I highly recommend you check it out for the full details on this story but here's a quick recap after taking over the region in 1950 the CCP slowly kept increasing its military presence in Tibet as you can imagine this really pissed off the local Tibetan population as the CCP was not giving them their religious and cultural Freedom Chairman Mao wanted Tibet to be a Chinese territory it didn't matter to him that the people there had their own culture and history so in 1958 a rebellion broke out in Tibet against CCP forces Tibetans wanted to kick out the CCP and take back their land but Mao decided to send in even more forces to reassert his dominance local Tibetan Rebels stood no chance against the people's Liberation Army or pla who had a numbers advantage and experience on their side India was closely following this clampdown India had always had a friendly relationship with Tibet including an economic relationship where North India would freely trade with Tibet Indian leaders decided not to get involved in this fight as to not cause a war with their neighbor Mao on the other hand did not share the same feelings about keeping the peace Declassified documents from decades later have shown that Mao was always paranoid that India was colluding with the USA and the Soviets to overthrow Chinese leadership looking back this really doesn't make any sense the USA and the USSR were in a pretty intense cold war in the 1960s and while India was a neutral nation that was friendly with both sides I highly doubt the USA and the Soviet Union would set aside the Cold War and collude together to overthrow the leadership in China anyway coming back to the Tibet story in 1959 the Dalai Lama fearing for his life in Tibet fled to India where he was granted Asylum this of course didn't please Chairman Mao as he saw this action as India playing a role in supporting the rebels against the CCP this in turn made him more aggressive towards India and Mao decided to show his aggression by encroaching on India's borders speaking of borders there's one point I quickly want to go over that's actually pretty important in 1914 while India was still under British control representatives from Britain China and Tibet gathered to determine the status of Tibet China agreed to allow Tibet to be an autonomous region and remain under Chinese control but they refused to put the promise in a treaty Britain and Tibet on the other hand signed a treaty creating this line called the McMahon line India to this day accepts the McMahon line as the official legal border between India and Tibet the CCP on the other hand well they didn't accept the McMahon line and in 1959 they kept pushing the limits of these borders to show their displeasure this caused both sides to increase their military presence around the border and then in August of 1959 the first bloody Clash erupted between the two Nations on the west side of the Border Chinese soldiers pushed into Indian Territory then a month later clashes happened on the east border this is when India learned that China had built a road inside of Indian Territory which has remained a pretty big issue to this day to settle these issues China offered India the west side of the Border if India agrees to give China more territory on the east side India of course declined this offer and firefights kept happening for the next few years then in 1962 Chinese soldiers discovered an Indian Post in territory that they believed to be under China's borders this news traveled to Mao and he saw this as the final straw Mao decided to send tens of thousands of soldiers in secret to both East and West sides of disputed borders the people's Liberation Army swiftly launched an attack on both sides surprising the Indian soldiers who were both outnumbered and inexperienced the pla on the other hand had plenty of fighting experience from their Wars in Korea Vietnam and Taiwan Indian troops suffered a humiliating defeat and the CCP was able to capture much of Indian Territory the Indian army tried setting up a counter-offensive by bringing in more soldiers but Mao was ready for it and squashed it pretty easily this is when India asked the USA military for help to take back its territory at this time the USA was one of the only two countries who had nukes the second one being the Soviet Union surprisingly this was also one of the few issues that the USA and the Soviets agreed on they both saw China as the aggressor in this situation and since China didn't want to experience their own Hiroshima they decided to withdraw most of their troops from Indian Territory however the CCP did decide to keep control of a piece of Indian Territory here in the oxide China region the same area where they had built a road connecting xion Chang to lasa remember this says this is an issue still to this day another ideological goal Mao had with this attack was to stop India from aligning with the USA in the Cold War Mao's thinking was that if he can show India that China is much stronger India will be afraid to do anything that will piss off China but this attack kind of caused the exact opposite to happen India and the US had become even closer as they both now had a common enemy in China this war also changed the borders between India and China now this is 10:05 where the problems start China attacked India captured territory and the new unofficial border was basically in Indian Territory in 1967 another war broke out and this time India was able to push back some of the Chinese soldiers and regained some of its territories this changed what China controlled in terms of territory versus what China believed to be its territory China believes that everything claimed in 1962 is a part of China but it lost some of that in 1967. India still honors the McMahon line agreement and believes that China is still illegally occupying Indian Territory this is the reason behind a lot of subsequent clashes that have happened here both countries have soldiers patrolling the area and both countries have different definitions of where their borders end I mean you can tell why this is a recipe for clashes right luckily both countries realize that but China refused to come to a peaceful agreement about the Border dispute however they did agree that soldiers from both countries cannot use military weapons against each other meaning no guns allowed in the two-mile strip around the supposed line of actual control these border disagreements are a big reason behind the india-china bitterness towards each other but the problems don't stop here as China grew economically its Ambitions on the world stage grew as well after Mao's passing Deng Xiaoping opened China up to the rest of the world with his open door policy this policy quite literally changed China's economy and its place in the world it was able to attract foreign businesses to China and quickly transform the country into a manufacturing hub millions of people were lifted out of poverty and China went from a forming Nation to the second biggest economy in the world but as the population started getting older and growth from attracting foreign manufacturing slowed down the CCP was forced to look elsewhere for future growth so it decided to feed two birds with one scone you see for a nation to be a superpower for it to be a formidable force on the world stage it needs to increase its influence with other nations and it needs to decrease its dependency on its enemies in short China needed to get stronger and minimize its weaknesses now we skip forward a little bit in our story because this plan was set in motion by Xi Jinping when he was elected taking the center stage China's new president and commander-in-chief of the people's Liberation Army Xi Jinping Xi Jinping as votes were counted there was little surprise he got 99.86 of the vote China's belt and Road initiative the Bri is a gigantic plant for a Global Network of ports roads Railways and other infrastructure to connect China to the world after being elected president Xi Jinping launched the most ambitious project in history to increase China's influence around the world China would give out loans to poor struggling nations in the guise of helping Nations that once struggled like they did but in return China gained control over countries with valuable resources or in a strategic location they may ask what if these poor countries can't pay back the loans well China would then get control over important resources like gold silver oil and access China carefully used loans to gain influence on struggling Nations and also choke out its enemies a prime example being India if you look at the map of the Belton Road initiative you can clearly see that there is one country that's left out not only that it seems like India is being encircled by this project that is controlled by China before we get into how China is doing that exactly let's first go over why China is doing this you see China believes it needs to do this in order to survive China's economy is very interconnected to the rest of the world especially to Western countries around one-fifth of China's GDP is from its exports the USA being its biggest export partner accounting for more than 500 billion dollars or 17 of all of China's exports the dependency doesn't stop there if you look at China's top 10 export Partners nine of them are us allies more than 50 percent of China's exports are going to countries that are likely to side with the USA if there's a war additionally China is one of the biggest importers of oil and it Imports almost double the amount of oil that the USA does and the majority of that oil flows from the Middle East which is transported through the Indian Ocean all of this oil passes through what some might consider to be one of the most important geopolitical choke points here in the Strait of Malacca it's projected that 80 percent of China's oil flows through this Strait this Strait is in the territorial Waters of Indonesia Malaysia and Singapore this straight is a very big weakness for China in case of any war or political disagreement this straight could easily be blocked off by enemies like India or the USA without access to this route it's very hard for China to get the energy to fuel its economy let alone a war in today's world oil is the lifeblood of the economy and its government China's solution to this problem is to build its own alternate route using the belt and Road initiative China has built pipelines both in Myanmar and Pakistan from the coast to Intercity China it secured long Port leases in Pakistan and Sri Lanka similarly China has also set up a military base in Djibouti to control Bob El mondeb a vital Strait off the coast of Djibouti that links the Red Sea to the Indian Ocean Persian Gulf and Asian exports Bound for Western markets must first pass through Bob El mondeb before reaching the Suez Canal between 12 and a half and 20 percent of all global trade passes through this Strait only eight miles from China's base is Camp limoneer after seeing all the moves China has been making a lot of military experts have pointed out that the Belton Road is not just a geo-economic plan it also has a military strategic advantage the ports have increasingly come to play a potentially more menacing role as dual use ports that can give the strengthened Chinese Navy a global reach it lacked entirely just a few years ago these strategic Investments are nicknamed The String of Pearls as the goal is to encircle India and put pressure on New Delhi India was aware of this already but the war in Ukraine showed every country in the world how important it is to secure your economic interest in the modern world wars can be won and lost before even stepping foot on the battlefield Thea realized that in the case of a war China's String of Pearls can be used as a way to choke off India's access to the World on top of safeguarding Chinese interests adding to this countries that received Chinese money were slow to criticize China whenever it would start skirmishes on the disputed border with India like it did in 2017 and 2020. there's also a rumor that China plans to start setting up military bases in countries that received Chinese loans and of course this was undoubtedly stressful for New Delhi as it didn't want to be surrounded by the Chinese military so India started laying out its own plan to safeguard its economic interests but it didn't just stop there later in the video we'll go over how India is taking advantage of China's trade war with the USA to hurt China where it's the strongest its manufacturing prowess but first let's go over how India is countering China's military to counter The String of Pearls India started its own Alliance to encircle China nicknamed the necklace of diamonds India is expanding its Naval bases and is also improving relations with strategically placed countries to counter China's strategies in 2018 India partnered with Singapore and Indonesia to get access to their Naval bases of Changi and sabang this increased India's influence and access to the Strait of Malacca one of the most important choke points for China and the rest of the world in terms of trade that same year India also got military access to the port of dukem in Oman this port facilitates India's crude imports from the Persian Gulf in addition to this the Indian facility is located right between two important Chinese pearls Djibouti in Africa and guadar in Pakistan India has also signed an agreement with Seychelles for a naval base in the region which will increase India's presence near the African continent while doing this India has also extended credit lines to Iran and agreed to build a port in the country to extend access to trade routes in Central Asia additionally India has extended credit lines in Central Asia to countries like Mongolia where Modi has agreed to develop a bilateral air corridor New Delhi has invested a lot in policies to improve relations with Japan and Vietnam these relations have helped increase Indian trade and consequently India's influence on countries around China but India realized this alone isn't enough it has also taken big steps towards speeding up its economic growth while taking business away from China you see the china-u.s trade war and covid provided countries like India with a unique opportunity because of economic growth in the past couple of decades living standards and wages in China have gone up dramatically this has become an 20:02 issue for companies that moved to China for their low labor costs furthermore terrorists from the trade War have added even more costs and the headache of operating in China increased multiple fold because of xi's covet clampdown this is where companies started looking outwards for their manufacturing needs for many countries India provided a perfect solution India's population is fast growing and according to the UN it's officially now the biggest nation in the world overtaking China this year furthermore the Indian population is a lot younger when compared to China's aging demographic the median age in India is 28. a lot younger when compared to China's 38. a big portion of Indian workers speak English in fact India has the second largest English-speaking population only behind the USA this definitely makes things a lot easier for companies looking to set up shop in India certain companies have already noticed these benefits and taken advantage of them one example of this is Apple which has already moved some of its iPhone production to the Indian states of Tamil Nadu and Karnataka and is exploring moving its iPad manufacturing to the South Asian Nation JPMorgan analysts even made calculations and their projections show that one in four iPhones would be made in India by 2025. India is simply capitalizing on the vulnerabilities that covet exposed in China the need for Apple to reduce its dependence on China as a manufacturing center has been clear for many years but the impact of the pandemic at the world's biggest iPhone assembly plant really underlined the problem the covid-19 related disruption was estimated to cost the company a billion dollars weekly it makes sense that Apple wants to avoid this kind of mess again the Indian government is welcome to Deals as Indian Prime Minister Modi has been working on attracting foreign direct Investments since he took office in 2014 sending FDI to a record 83.6 billion dollars in the past fiscal year with low-cost labor available low cost of production and a willing government it's not hard to see why a good portion of business is leaving China for India at the current rate India stands to take a lot of China's business because of all this the U.N predicts that India's economy is expected to grow at 6.7 percent in 2024 compared to the measly five percent expected by China's economy and it's not just next year many organizations forecast that India's economy is expected to grow at a much faster rate for years to come compared to China's economy India has already started putting this growth to good use it's now lending money to Neighbors in order to avoid having them in indebted to Chinese loans it has given 8 billion dollars to Bangladesh 2.1 billion dollars to bail out Sri Lanka after a recent collapse 1.7 billion dollars to Nepal 13 billion to the Maldives and a few more while India lags far behind China in its overseas lending New Delhi has stepped up its efforts in recent years providing tens of billions of dollars in credit to neighboring countries including financially distressed Bri recipients like Sri Lanka Indian companies have also expanded rapidly in the region providing a counterweight to Chinese commercial activity Indian policymakers see countering Bri as vital to avoid being surrounded by pro-chinese governments and infrastructure they speculate could one day serve beijing's military interests India has definitely stepped up its efforts in containing China India publicly downplays the competition with China but its actions show India doesn't want to be held hostage to China's economic or military might recently the first bloody clashes in 45 years took place at the india-china border but you might not have seen this news because a lot of traditional news organizations are not good at properly covering important geopolitical news that's why I launched Global Recaps a geopolitical newsletter that covers important geopolitical news in a simplified manner every evening I send out an email directly to your inbox covering important stories that you can read in just a few minutes best of all this is completely free and you can sign up right now by clicking on the link in the description Mexico's economy is on the rise an increasing number of foreign businesses like to do business in Mexico and it looks like this will only increase in the future right now Mexico sits in The Perfect Storm preparing it for an economic boom this is due to multiple factors both inside of Mexico and also outside in the changing International landscape Mexico has relatively low labor costs which attracts manufacturers looking to Outsource their operations Additionally the country's population can provide a lot of skilled labor which makes doing business in Mexico even more attractive and something that separates Mexico from all the other low-cost manufacturing countries is one simple Geographic reality Mexico is located right next to the largest economy in the world the United States of America it's not hard to figure out why businesses like this fact when you manufacture your products in Mexico you can easily and cheaply export your products to the huge Market in the United States so Mexico is a huge opportunity for manufacturing which can attract businesses and Spark economic growth and the changing global economic environment is turning this opportunity into a reality right now the United States outsources a lot of its manufacturing to China but due to a variety of reasons this trend seems to be shifting it's only a matter of time before China's position as the manufacturing Behemoth will crumble China's downfall will inevitably cause Mexico's economic rise because Chinese manufacturing will have to move somewhere else but in a weird way Beijing is actually trying to benefit from Mexico's Rise by gaining an economic footprint in the country in this episode we'll go over how these complex geopolitical and economic changes are causing an economic boom in Mexico what's happening in Mexico is very interesting because it doesn't only affect One Nation but really the entire world and just a side note if you enjoy my videos be sure to hit that like button down below without your help this video won't get very far in the algorithm it took a lot of work to cover this topic so your support is really greatly appreciated thank you so much a tectonic shift is underway in the North American economy we are seeing a lot of investment for Chinese companies and Mexico is more motivated to attract that the latest example of Chinese business expansion is the 850 hectare hafu San Industrial Park it's the potential for creating as many as 7 000 jobs over the next five years and bringing their products closer to the world's largest market the United States multiple Chinese companies are now moving their manufacturing to Mexico they've already invested billions of dollars in the country building up factories and Supply chains this is a fascinating development because it tells us two important things Mexico is now a very attractive place to do business and China is well not that attractive anymore after all why are Chinese companies moving out of China if things are going well at home the truth is it's not going well for the country since the coveted pandemic hit in 2020 things are going downhill in China the first thing we should look at are the supply chain weaknesses that were exposed during the recent years this isn't the first time you'll hear about globalization and Outsourcing manufacturing as these Concepts have shaped our modern economy basically companies from Western countries have moved their manufacturing to other cheaper countries for decades globalization has been a trend that countries like China benefited from enormously because other countries started to Outsource their manufacturing China became a manufacturing Giant China had an abundance of cheap labor which made it the best place for manufacturing businesses but this globalization had one huge disadvantage it makes countries reliant on other countries China is the world's top manufacturer producing 28.7 percent of the world's manufacturing output because of this huge market share Global Supply chains are largely reliant on the Chinese economy and when the covid-19 pandemic happened this over-dependence on the Chinese economy clearly showed the long and ruthless lockdowns in China caused economic unrest and supply chain weaknesses all over the world a lot of governments came to the same conclusion it's not smart to have all your Manufacturing in one country diversifying your manufacturing by Outsourcing it to different countries is a lot safer even though it comes with a heavier price tag due to more Investments for example apple is now diversifying its manufacturing by adding Indian companies to its supply chain the Chinese companies moving to Mexico might be doing the same thing diversifying their Manufacturing if something unfortunate were to happen in China these companies would still have their manufacturing plants in Mexico up and running but supply chain safety isn't the only motivator driving these companies in Mexico cheap labor certainly has a huge role to it the quoted monthly earnings in Mexico are 874 dollars which is significantly lower than China's quoted earnings of one thousand three hundred and thirty six dollars per month Chinese manufacturers want to make money and by moving to Mexico this gets easier due to the lower labor costs and the costs of 30:01 Labor aren't the only explanation in China many manufacturing companies are facing acute labor shortages the new Chinese generation is smaller than the older ones and many young Chinese people aren't willing to work factory jobs the reason for this is that the new generation has a higher education than the previous one making them well overqualified for manual work basically there are less people in China and even less of them considering low paying jobs this has led to more than 80 percent of Chinese manufacturers facing labor shortages from 10 percent of up to 30 percent if these manufacturers don't have the people at home they're forced to move abroad and Chinese companies moving to Mexico fit perfectly in this trend but the reasons for things going downhill in China aren't only economic they're also heavily political the turmoil that began with the U.S China trade War has caused significant damage to Chinese Manufacturing in 2018 U.S president Donald Trump began to impose High tariffs on imports from China which hurt Chinese businesses wanting to export to the huge U.S market in one single move he increased the taxes on 200 billion dollars worth of goods and President Biden well he didn't make the situation a whole lot better for these Chinese companies his administration maintained the tariffs Trump imposed which didn't help with stopping the trade War he even went as far as to add new restrictions on the Chinese economy most notably on the chip industry that is so crucial to the country and deals with other countries like Japan or the Netherlands Biden effectively destroyed the supply chains of Chinese chip manufacturers for Chinese companies exporting to the United States this ongoing trade war is very bad for business this is yet another reason for Chinese manufacturing companies to now move to Mexico is located right next to the U.S market and it doesn't have the same restrictions placed on itself as China has adding on to this diversifying your manufacturing to other countries is a smart move due to the same political reasons with the situation around Taiwan getting very tense a conflict between the United States and China is not completely out of the picture an American four-star general predicts that the two will be at War by 2025. now this is a topic for a whole nother video but these speculations do concern companies about potential geopolitical risks of doing business in China maybe it's safer if you have some of your manufacturing elsewhere because a war will be pretty devastating for everyone involved and in the terrible scenario that comes with a war there's a good chance Mexico won't be involved in short there are a lot of Economic and political reasons for Chinese companies now moving over to Mexico and it isn't just Chinese companies that are moving out of their own country for Mexico other companies are seeing the benefits of Mexico too American businesses that were formally Outsourcing their manufacturing to China are now considering moving to their neighboring country for example the car manufacturers Tesla General Motors and Ford are all building manufacturing plans in Mexico and companies from Europe and other Asian countries are doing the same especially when the United States is their primary export Market it's safe to say that the trend in global manufacturing is Shifting China's downfall in manufacturing is turning out to be Mexico's rise as with every Trend there are push and pull factors the push factors are that China isn't that attractive anymore for manufacturing we've already discussed the reasons for this which are both economic and political so let's go over the poll factors and uncover why Mexico has great potential to be a manufacturing economy Mexico has surpassed China as America's top trading partner signaling a changing Dynamic within the global economy Mexico hosted the North American Summit with the leaders of the United States and Canada the North American leader Summit is expected to focus on economic issues and climate change but also the situation on the U.S Mexican border perhaps one of the greatest poll factors driving manufacturers to Mexico is the end of globalism many experts are speculating that globalism is reaching its final days this major shift has to do with the increasing International tensions in the world one of the preconditions for globalism has always been International Peace and Order connecting each individual economy with each other to form a global economy isn't an easy task you need to have everyone on the same page and you must provide every country with safety and assurances after the second world war the United States was so strong that it could enforce this the US LED World Order provided relative stability which led to an increasingly globalized economy as International Trade flourished but now this global economy appears to be crumbling the Russian invasion of Ukraine is a very good example of this Russia challenged the Western influence in Ukraine by starting an illegal Invasion as a result the world became a lot less stable and the global economy suffered with China's increasingly aggressive stance regarding Taiwan the U.S led World Order is also being challenged Chinese and American interests regarding Taiwan are completely opposite and China is showing no signs of backing off in the scenario that this situation escalates boy oh boy we will definitely see the globalized economy crumble right now the world is dependent on Taiwanese chips which could turn out to be disastrous and it's not only us enemies that make globalism difficult to execute its allies are also giving it a hard time for example the European Union is not blindly following U.S policy anymore macron has repeatedly said that he doesn't want to be a vassal for the U.S and that he rather wants the EU to form an independent strategic block even U.S allies don't accept an american-led World Order anymore from all of these geopolitical developments we can conclude that the United States dominance is being challenged for multiple sides so what on Earth does this have to do with Mexico well a lot actually with the US no longer leading the world order the old version of globalism isn't viable anymore consider this American ship manufacturers used to move their factories to other countries now Biden is paying billions of dollars for them to come back nowadays world leaders prefer to have a secure and robust economy at home home above all the benefits globalization can offer this is because globalism can be safeguarded by a dominant power like the United States anymore as a result of the crumbling World Order international relations aren't as stable as they used to be think about Russia or China for example because of these significant changes countries want to reduce their dependency on each other by moving chip manufacturing to the US Biden effectively reduces the dependency on Taiwan and China if this trend continues globalism is over but Mexico might be the rare exemption to this the United States doesn't mind being dependent on Mexico because the two are neighbors while the globalized economy is in Decay stronger Regional economies might be the solution Regional economies are basically a watered-down version of globalism regional economies can have greater security and stability but they still have some of the benefits globalism can offer this includes things like bilateral trade with other nations and economies of scale therefore an improved relationship between the US and Mexico can be vital for the future because it can create a strong Regional economy as globalism appears to be ending countries will need to focus on their Regional economies especially North America a stronger Regional economy will provide a lot of opportunities in and of itself you could even argue that this Regional economy can outperform the former globalized economy in a lot of ways getting goods from Mexico to the US is simply a lot faster and a lot cheaper than importing it from China from Mexico to the US you can transport goods via trucks trains or ships within a few days when you're importing from China to the US however it can take multiple weeks if you have bad luck as we've already discussed Mexico simply has a cheaper labor force which makes for a greater manufacturing opportunity on top of that Mexico doesn't face the same labor shortages as its Chinese counterpart the tariffs for trade between Mexico and the US are also significantly lower for trade coming from most countries the United States asks tariffs as a form of Taxation on Imports but due to the usmca agreement and Port tariffs between the U.S Canada and Mexico are minimal or even non-existent for a lot of products you don't have to pay an import tax when you're trading between these three countries this is yet another benefit of a stronger Regional economy Mexico can become a powerful manufacturing hub for the United States and the opportunities don't only stay at manufacturing Mexico also has a highly educated Workforce fun fact Mexico graduates more Engineers annually than the United States this means that not only manufacturing companies but also technology firms can grab the opportunity to Outsource to Mexico this is great news for Mexico but also for the United States right now the US is facing a critical shortage of Engineers ranging in the millions of job offers when you look at their respective economies Mexico and the United States complement each other pretty perfectly the United States needs both cheap and skilled labor and a reliable trading partner and Mexico needs jobs and companies to boost their economy all the more reason to start a strong wrong Regional economy conventional wisdom would say that a good neighbor is better than a far-flung friend which definitely applies to the US and Mexico sadly enough the political reality isn't as promising the United States and Mexico have had their issues so to say illegal immigration coming from Mexico is one of the biggest political issues in America with more than two million border Encounters in the fiscal year of 2022 40:00 alone most of the migrants don't come from Mexico however but from other Latin American countries like Honduras and El Salvador the reason for this Mass migration is poverty and crime that many of the failed States in Latin America have failed to solve many Latin Americans think that they'll have a better chance in the United States being the more stable and prosperous country in the continent but a lot of Americans fear that mass immigration will cause problems at home especially the Republican side of the debate that's why Donald Trump tried to build a wall on the border to prevent migrants from illegally coming into the country The Unwanted side effect of this policy was a strained political relationship between the United States and Mexico there was a lot of political back and forth on the necessity and The Unwanted effects of the wall Donald Trump blamed the Mexican Government for not doing enough about the illegal migration issue in turn the Mexican Government blamed him for worsening their Mutual relation with the wall building a wall isn't good for bilateral trade as it slows down imports and exports coming from both sides the strained relationship isn't only to be blamed on the illegal migration though the high crime rate in Mexico along with its Infamous cartel violence also causes political concern the Mexican Government doesn't have full control over its own country because organized crime groups have become way too powerful the most powerful cartels in Mexico have military-grade weapons and equipment and through corruption they also have a large political say in the country the United States doesn't like this because these cartels bring illegal drugs into the country with the risk of spreading violence the ongoing fentanyl crisis has caused thousands of American deaths and it's directly related to the cartels in Mexico who import contaminated drugs some politicians call for the US military to intervene in Mexico to address the issue of the cartels the Mexican president Lopez obrador doesn't like this he wants to solve the organized crime issue on his own and preserve his country's sovereignty he even made the false claim that none of the fentanyl was being produced in Mexico and that was all America's own problem right now the drug war cooperation between the United States and Mexico is at its lowest point in decades law enforcement from both sides are barely cooperating to solve their Mutual problem so the issue of organized crime is also something separating the United States and Mexico but increasing economic ties might be the way out one of the reasons for illegal migration and organized crime is poverty which is related to economic underdevelopment therefore when Mexico gets more Prosperity it will theoretically have lower crime rates and less migration the Mexican Government will also have more money to fight issues like organized crime and illegal migration when bilateral trade grows Mexico's economy will be on the rise and these issues can be resolved that's why building a strong Regional economy is one of the best ways to improve the strained relationship between the US and Mexico the political relations are difficult but they can be resolved once the two countries just start cooperating we should also look at the politics inside of Mexico government policies have a lot of effect on the economic success of a country and looking in the past decades the economic growth it hasn't been great this chart shows that the Mexican economy hasn't experienced outstanding growth over this time period the GDP growth rate has been irregular with ups and downs and they haven't been fantastic in general in fact when we compare Mexico's GDP growth with that of the United States it appears like there has been no economic growth at all the opportunities for economic growth were certainly there but the Mexican government has struggled to turn them into reality Mexico could have been the most successful country in Latin America because it has a great opportunity for manufacturing as it shares a border with the US but Mexico's economy hasn't outperformed other countries in Latin America in any way that's because economic success has a lot of preconditions like large amounts of foreign direct investment and an improved business environment first of all Mexico lacks infrastructure and sufficient Public Utilities to achieve economic success the root cause of this problem is the lack of government taxes to fund public infrastructure projects the government only invests 1.3 percent of its GDP into these projects which is a very small amount compared to many other countries now this problem could be relatively easily solved by attracting foreign direct investment the private sector would love to invest in Mexico because of the growth opportunity ahead with increased foreign investments the infrastructure problem could be solved however Mexico doesn't attract that much Capital foreign direct investment inflows account for only 2.6 percent of its GDP which isn't a crazy high number this is definitely not enough to solve the infrastructure problem that Mexico is currently facing however with more and more companies moving to Mexico for manufacturing this foreign investment inflow will surely increase but even with the odds in its favor the government in Mexico is still struggling to get more companies to invest in the country some of the government policies are causing this deficiency for example in 2022 the Mexican president tried to let the government take over the energy sector which was defeated in Congress this move has scared multiple private energy companies which could have invested in Mexico's underdeveloped energy infrastructure this is just one of the many examples of government policies that scare away foreign investments coming from the private sector president Lopez obrador focuses on state-led growth which decreases the impact companies can have in Mexico this isn't helpful with achieving economic growth because the huge opportunities for Mexican growth lie in the private sector the business environment is also a reason for the lack of economic success the Mexican Government tries to give businesses all kinds of incentives in order to spark economic growth this is the case with the makila Factories near the U.S Mexico border which have received multiple benefits from the government these factories manufacture goods for American companies just South of the Border and they don't have to pay taxes or import duties to the Mexican Government The Mexican government has also created various special economic zones to improve the business environment they provide various benefits to the company's in the economic zones such as having to pay no income tax for 10 years and no import taxes in a lot of ways the business environment is great for large corporations but the problem is that the rest of the economy just lacks behind nearly 30 percent of Mexico's economy is informal meaning that it's not registered nor taxed by the government in fact nearly 60 percent of Mexicans are employed in this informal sector this has a huge negative impact because the government can't collect taxes on this informal economy and 60 of Mexicans don't enjoy Social Security one of the reasons for the informal economy is the excessive regulations that make doing business in the formal economy very hard paying taxes alone takes Mexican firms 241 hours each year on average something that small businesses can't afford to do the huge informal economy is directly one of the reasons for Mexico's sluggish economic growth countries with large informal economies generally suffer from low productivity poor governance and high inequality these are things that have dragged Mexico's economy down and have historically caused low growth rates Mexico might attract a lot of large corporations but it also has to solve the informal economy in order to grow adding on to the complexity of the issues is that the situation varies dramatically per state in Mexico looking at the GDP per capita for every state you can see that there is a huge difference in some states the GDP per capita is about ten thousand dollars while in other states it's forty thousand dollars per capita or even higher that's four times the difference just on a regional scale this can be attributed to poor government policies that aren't organizing things well but it can also be blamed on different policies on a state level some states like Mexico City Nuevo Leon or Baja California have received relatively high amounts of foreign direct investment as compared to others this is because some states are just better at attracting businesses than others these states also have better legislation solving the problems of the informal economy more efficiently but to truly achieve economic success in Mexico every state needs to grow and the other states shouldn't get left behind this is something that the country lacks right now however all these political issues can be solved eventually when the country takes an example from successful States like Nuevo Leon Mexico could work out a solution to the problems if the entirety of Mexico manages to attract businesses and to grow its formal economy an economic boom is inevitable at least that's what the governor of Nuevo Leon predicts many problems can be solved when this economic boom happens for Mexico it could reduce poverty and the issues related to it in general the quality of life will improve and Mexicans will get more prosperous for the United States Mexico could turn out to be an invaluable partner with all the benefits the bilateral trade can offer such as proximity and Reliance these stronger Regional economy in North America will be a serious competitor to China's economy which has a huge impact on global geopolitics talking about China the CCP is decided between two strategies when it comes to this change in Mexico it can either try to compete with Mexico and fight for its own manufacturing industry or it can cooperate with Mexico and gain influence within the country at first glance Beijing trying to compete with Mexico is a viable option after all 50:01 China's economy is more than 10 times bigger than that of Mexico China's population is also more than 10 times bigger than Mexico's population and I know that economic and demographic figures coming from China aren't that reliable but China certainly has an advantage in size Mexico won't be able to take over China's manufacturing completely so China will try to remain competitive on a global level but when it comes to the U.S market well the story is a little bit different in the U.S market the competition between China and Mexico isn't a story of David and Goliath in 2021 China exported about 600 billion dollars to the US in the same year Mexico exported about 400 billion dollars to its northern neighbor in the U.S market Mexico is a serious competitor to China because of the shifting Trend in North America with a stronger Regional economy China stands to lose some serious market share in this market it'll be harder for China to compete that's why the CCP is adopting a different policy cooperation with Mexico the CCP doesn't want to lose control over the U.S export Market because this is one of its biggest strategic advantages with Mexico increasing its market share the only way for the CCP to retain this Advantage is through getting influence in Mexico one of the ways to do this is by building infrastructure projects which the CCP is trying to do in the country for example Chinese companies have signed multi-billion dollar railroad contracts with the Mexican Government this policy of gaining influence through infrastructure projects isn't new for the CCP however this traditional way for China to gain influence isn't going to cut it Mexico is one of the few emerging markets that isn't part of the Chinese belt and Road initiative this is partially because Mexico doesn't want to have too much Chinese investment within its borders if Mexico would take tons of loans from China it could upset the United States their biggest trading partner but luckily for the CCP there's another way of getting influence in Mexico and that's taking over a part of the Mexican economy itself as of 2022 there were 1289 Chinese companies investing in Mexico this includes Chinese car manufacturers like byd chungan Motors or mg Motors of course these are private Investments but in China companies aren't that independent from the CCP as they have to follow State policies set by Xi Jinping himself through these private Investments the Chinese government is gaining a foothold in the Mexican economy this could be beijing's master plan to counter an independent American economy after all importing from Chinese companies in Mexico isn't much different than importing out of China itself and this is bad news for the United States because it desperately wants to be independent from China but it's clear that the CCP has a different agenda to wrap it all up an economic boom in Mexico seems more than logical Mexico and the United States could grow their bilateral trade in a move to strengthen the regional economy cheap and reliable labor just South of the Border is all the US can wish for when it comes to manufacturing and Mexico which is still struggling to grow its economy would love to expand its exports to the biggest economy in the world because their interests are aligned the political differences between Mexico and the United States can be solved the political situation within Mexico could also improve with States like Nuevo Leon leading the way the question now becomes will this new alliance make the United States independent from China the United States hopes to replace Chinese manufacturing with manufacturing coming from Mexico for economic and political reasons but the CCP isn't letting this happen as it's moving hundreds of Chinese companies to the country one thing is certain though Mexico is the perfect storm for an economic boom with all these developments Mexico could become a manufacturer's Paradise China has been eyeing Africa for decades now as growth in China slowed down the CCP realized that taking over Africa was the solution that's because Africa is expected to become a Powerhouse in the coming decades when you think about global superpowers countries in Africa aren't the first ones that come to mind as a superpower you need to have a huge economy a powerful military and a lot of international influence not a lot of African countries have these things yet but a few decades from now this is going to be very different in 2030 42 of the world's young people will be living in Africa by 2050 the prediction is that more than a quarter of the entire world's population will be African countries like Nigeria Ethiopia Egypt or Congo will have one big advantage over the coming years their huge populations while the rest of the world is struggling with low birth rates and Rapid aging African countries will experience exactly the opposite their populations will be extremely young and it will be growing rapidly just think about it Italy only has 1.24 births per women while Nigeria's birth rate sits at a whopping 5.31 these demographics will shape the 21st century in this video we'll talk about the dramatic effect of Africa's demographics you may have guessed this already but this population growth is creating a huge Economic Opportunity in fact it is so important that today's superpowers are fighting for influence in the continent and talking about influence you guys can influence the channel by hitting the like button down below sometimes the algorithm decides to throttle some of my videos your support is greatly appreciated because it allows me to make more videos like this thank you very much 70 percent of Africans are under the age of 13. this is happening while the developed nations are experienced in a rapid aging population a country the size of Rwanda can sustain this kind of population growth it's so crowded here they teach in shifts four billion the population of Africa at the end of this Century basically going to be half the planner looking at facts such as birth rates and median age it becomes obvious that Africa has some very powerful demographics and as we've seen in China during the last 40 years or so these powerful demographics are a very valuable asset to illustrate just how much of an advantage your demographics can have these days let's look at China's example in more detail in the modern globalized world where Goods can be traded across the entire Globe population numbers give a country an economic advantage China's economic boom has proven this when China opened up its Market to the rest of the world in 1978 its huge population was one of the drivers causing spectacular GDP growth the reason for this is simple there was a lot of demand for labor and especially cheap labor when you have a huge and cheap labor force it becomes easier to start an export economy companies across the entire world look for places with an abundance of cheap labor so that they can produce their products as cheaply as possible and make as much profit as possible in 1978 China was that place all over the world companies started Outsourcing their manufacturing to China because producing there was just pennies on the dollar nowadays the result of this process is visible on most of the products you buy you know the all too familiar made in China logo on the back of most Goods but wages in China have risen significantly over the last few years as a direct result of their economic growth this chart makes it clear that Chinese labor isn't nearly as cheap as it was in 1978. so is China still the go-to destination for manufacturing not really and population wise China is also going through some trouble the country has a rapidly aging population just like many Western countries China's median age is already nearing 40 years old and this is expected to rise to 50 within a few decades there will simply be a smaller percentage of people who are able to work so for companies seeking an abundance of cheap labor China just isn't it companies will have to search for different places to find their low-cost labor and Africa might be where they'll go right now 60 percent of Africa's population is under 25 years old yeah that's an absolutely crazy statistic and Africa's total fertility rate sets at just above four meaning that every woman has four children on average with most Western countries having birth rates below two this gives Africa some clear advantages because of such strong demographics Africa will have a huge Workforce in the future and a cheap one too according to a United Nations report most of Africa isn't yet industrialized The Only Exception being South Africa this is of course not particularly shocking but it has a huge impact seventy percent of Africans rely on the agricultural sector to make a living which shows that many economies in Africa aren't yet Advanced underdeveloped countries that aren't industrialized also tend to have a weaker currency meaning that one dollar has a lot more purchasing power there relative to other countries this means that wages are very low compared to other countries who've already fully industrialized when you look at this map showing the median income per country it becomes clear that the continent of Africa has the lowest wages in the entire world in the long term this will be a huge opportunity for businesses seeking to cut their expenses after all an abundance of cheap labor is an offer many companies can't refuse it's a pretty good bet that many companies will move to Africa in the long term and this isn't bad news at all for most Africans when businesses move to the continent African nations will experience an economic phenomenon similar to China industrialization companies moving to Africa due to low 1:00:10 labor costs could cause the entire continent to have an economic boom the companies that move to the area will attract other businesses which will then attract even more businesses and so on and so on I'll give an example to further illustrate this let's say some manufacturing companies move to a certain country these new companies will attract a variety of other businesses construction companies logistics companies producers of raw Goods energy suppliers you get the point before you know it you can have entire new Industries this ripple effect which is called industrialization may happen to Africa at some point in the future as we've talked about earlier Africa is a huge business opportunity due to its large and cheap labor force so businesses moving there and sparking industrialization is not entirely out of the picture and this will be a huge economic event the industrialization of Africa will open up thousands of markets with billions of consumers it will create Market opportunities for existing businesses and it will also give rise to many new business opportunities in other words this is a multi-trillion dollar Enterprise now I won't claim that this industrialization could happen as soon as a few years from now I mean in the short term the economic success of African countries relies mostly on individual government policies and to be honest it doesn't look too exciting for the short term it's important to understand why Africa failed to attract businesses thus far and the reasons why it's lagging behind the rest of the world right now corruption is a major reason for why Africa is still underdeveloped and why it failed to achieve economic success on the corruption perceptions index which ranks how corrupt different countries are African countries scored 33 points on average so to provide context a hundred points means zero corruption and zero points means a totally corrupt regime so 33 points on average is a very bad statistic having a corrupt government doesn't help with a country's economy because a lot of the money goes straight into the politicians pockets and corrupt politicians don't exactly have their own populations as their number one priority which leads to bad policies worsening the economy another reason for Africa still being underdeveloped are the potential risks of doing business there due to political instability social unrest and a bad reputation in general many African economies have failed to attract businesses many countries in the continent are labeled as risky and companies that want to move their manufacturing don't prefer to invest in these risky countries I should also mention the lack of proper education 98 million children in Africa are not going to school although this doesn't matter for unskilled labor it's still a huge factor in keeping Africa's economic growth and development down but perhaps one of the biggest reasons is this a lack of infrastructure when there aren't roads Railways and ports in a certain country well good luck doing any business there many African countries are suffering from this problem a severe lack of infrastructure which is keeping businesses away according to a McKinsey report Africa lacks behind the rest of the world when it comes to roads railroads and in energy infrastructure to address this issue African countries need more than a hundred billion dollars every year when you don't have the infrastructure put in place economic growth becomes impossible all of these reasons make it very hard for African countries to industrialize within this decade corruption political instability and a lack of education and the infrastructure Gap they're all huge problems but within 50 years who knows how the situation might change African governments will get new leaders which are hopefully less corrupt new government policies could also decrease the risk of doing business and improve the education system there are a lot of factors holding back Africa's economic development but that doesn't mean Africa stands no chance in the long run the economic problems are hard to solve but Africa's demographics will definitely help in finding the solution if African countries manage to follow the same path as China did they can surely profit from their young and growing populations and the infrastructure Gap that problem may be solved sooner than you think because other countries are eager to help out there's no doubt that leaders and governments from all over the world are looking at the situation in Africa very closely after African countries industrialize they will grow into sizable economies to get a better position in the future loads of countries would like to strengthen their ties with African countries after African nations grow their economies they will have a stronger military and more International influence in general for other countries this provides opportunities for cooperation both economically and politically all the more reason for global leaders to look at Africa right and that's exactly what leaders all over the world are doing they're trying to gain influence in Africa before this industrialization will take place because when it happens the industrialization of Africa could be one of the most important events of the 21st Century as you can imagine today's superpowers have a lot of geopolitical interests and objectives in this whole development having influence in Africa is a strategic objective for countries like China the United States or the countries of the EU unsurprisingly these countries are sending billions and billions of dollars to the continent in the hopes to secure a good position for the future in fact the major international players of today are fighting each other to get their own piece of the pie so let's look at how this race for influence in Africa is reshaping the World of Tomorrow thank you China's belt and Road initiative Europe's global gateway and the United States build back better world all have one thing in common the programs are pouring billions of dollars into Africa in the form of Investments and they aren't just doing this to be nice for once and to help Africa develop itself of course there are strategic objectives involved in these massive undertakings the first one is securing an economic footprint in Africa when African countries industrialize China the US and the EU want to secure trading relations with these countries it would be great news for their economies and they sure don't want to miss out on any massive opportunities so securing trade relations for both imports and exports is a must investing in African countries will help with these trade relations the economies of the recipient countries will grow as a result which provides trading opportunities and most of these foreign investments come in the form of loans which have conditions to strengthen trade relations with the lender when China gives out money to build a port it can make arrangements to allow Chinese companies Priority Access so these loans can help to build solid trading relations another objective for investing in Africa is to make political allies for the future there are 54 countries in Africa so it's very useful to have at least some of them on your side politically African countries will grow in importance because of their huge populations so securing good political relations with these countries is a must for countries like China or the us one of the best ways to befriend these African countries is to help them financially in huge parts of Africa crucial infrastructure like Railways ports or adequate Road networks have yet to be built because many African nations aren't in the best shape money-wise most governments turn to loans to finance massive infrastructure projects and other countries are happy to provide them with these loans after all everyone wants to be friends with Africa in the future multiple countries are eager to lend out billions of dollars to African countries these investments in infrastructure will spark Africa's economy to grow which makes Africa's industrialization a self-fulfilling prophecy once the roads and the bridges are built Africa can start participating in the global economy one country understood this very well and that is China it is estimated that China has invested around 300 billion dollars in Africa which includes many infrastructure projects that Africa needs so desperately these huge Investments fall under China's belt and Road initiative beijing's International infrastructure program in Africa alone China has built more than 13 000 kilometers of Railways nearly a hundred thousand kilometers of Highways about a thousand Bridges and nearly 100 ports and 80 large-scale power facilities and keep in mind that China is already the biggest bilateral trade partner of the African continent meaning that economic ties between the two sides are already pretty strong there are currently around 10 000 Chinese firms in the continent giving China a strong presence and the huge amount of investment that Beijing is sending into Africa will only increase this Chinese presence and remember all the roads and bridges made with Chinese loans are obviously being built by Chinese firms in a weird way sending money to Africa actually helps Chinese businesses which gets China an even bigger footprint now we all know why China wants this influence in Africa so desperately Africa is a huge Economic Opportunity for the future for China Africa can be both a sales market and a crucial importer of goods the fact that Chinese firms could sell their products in Africa shouldn't be overlooked with a forecasted 2.5 billion people living in Africa by 2050. Africa could be a huge sales market for China especially after the continent industrializes and starts importing more and more products no wonder that the CCP 1:10:10 is interested in growing Chinese companies in Africa ultimately it makes the CCP more powerful internationally because it gives them an economic boost apart from exporting Chinese products and companies Imports coming from Africa are just as important for Beijing China needs natural resources for domestic consumption in Industries like car manufacturing and a lot of African countries have an abundance of these resources they have huge reserves of things like Cobalt copper and platinum Chinese state-owned companies strategically invest and take control over mines in Africa to secure the supplies of these essential minerals and metals for example they've taken control over Cobalt deposits in the Democratic Republic of the Congo apart from these resources cheap labor is also a driver for Beijing China now has a declining Workforce and increasingly higher wages which makes manufacturing less and less attractive to do at home the Chinese economy needs to transition away from a manufacturing economy at some point which can be a whole video on its own by the way sooner or later we could see Chinese companies moving their manufacturing to other countries and Africa is a great place to move it when it comes to cheap labor it's clear that investing in Africa has been any advantages for China and since a decade or so Beijing has had the money to do so when China's export economy grew to its current level a lot of money was flowing into the country China was exporting more than it was importing and Beijing had a beautiful problem it had a surplus of capital you can see in this chart that China has a trade surplus worth hundreds of billions of dollars at this point china has a lot of capital sitting at home Capital that it can invest into African countries that's why we're now seeing China giving out tons of loans for example in the Belton Road initiative this has raised concerns in some countries because they fear that China is using these loans to gain power and influence one theory is that China has so-called debt trap diplomacy China could overload economically unstable countries with debt until they eventually go bankrupt after this happens China could take over all the infrastructure the debt was used for and take control over crucial locations in some countries like Sri Lanka the debt trap diplomacy has already worked when Sri Lanka couldn't pay off its Chinese debts it resulted in China taking ownership of a port in Sri Lanka for 99 years while this is definitely concerning it's not going to happen anytime soon in Africa China only holds 12 percent of Africa's public and private debt which is not enough to really take over the continent by any means although China is rapidly increasing its loans in Africa through the Belton Road initiative it's a long way from actually implementing debt trap diplomacy in most African countries but the theory certainly has gotten one aspect right China wants to gain power and influence on the continent and this didn't go unnoticed by other countries global gateway will mobilize 300 billion think of wind or solar to produce hydrogen but it will also support schools and education systems the European Union which is the economic Alliance of 27 European member states responded to the Chinese Plans by launching its own program with the global gateway investment package the EU wants to help underdeveloped countries by developing digital transportation and infrastructure Networks until 2027 the European Union will mobilize up to 300 billion Euro for This Global project of which 150 billion Euro will go to African countries obviously the European Union started this program as a response to the Chinese Belton Road initiative after China started the multi-trillion dollar infrastructure project the EU couldn't just sit idly and do nothing in response but many criticize the global gateway project for being nothing more than a PR stunt 300 billion euro is nowhere near the amount that China has invested some estimate that China has invested more than a trillion dollars in the Belton Road initiative already it will be hard for Europe to invest this amount of money in the foreseeable future apart from the difference in size the eu's project also has some different goals than its Chinese counterpart China's sales pitch is building roads Bridges and Railways and all of that fast and cheap but Europe's global gateway is focused more on sustainability and providing green Energy Solutions and the program doesn't only concentrate on hard infrastructure but also on soft infrastructure like healthcare and education systems the critics of the project say that this approach won't work in Africa underdeveloped countries in Africa want to get lots of infrastructure fast and cheap whether it's sustainable and green or not and they've had enough of Aid packages they want to solve the underlying problem which is the economic underdevelopment but in some cases the European approach with quality projects over the sheer quantity of them may actually reap some benefits there are numerous Chinese infrastructure projects in Africa failing due to the poor planning and execution the standard gauge Railway in Kenya is an example of this a multi-billion dollar Railway project aimed at connecting Uganda and Kenya with each other has failed dramatically the railway project was stopped before it even crossed the Ugandan border because Kenya couldn't pay the Chinese debts anymore the Kenyan government racked up a total of 4.7 billion dollars in debt from this Railway alone and that's with the GDP of just 110 billion think about that racking up more than four percent of your GDP in debt for just one uncomplete Railway adding to this the railway itself wasn't very feasible either during the first three years of operation the project lost more than 200 million dollars the railway still bleeds cash even when it's operational the reasons for This Disaster vary from corruption to poor planning this example is very telling sometimes the big and shiny projects turn out to be terrible mistakes the European Union however focuses on smaller and more sustainable projects which gives it an advantage from constructing six small hydropower plants in Nigeria to constructing a solar energy plant in Djibouti Europe can make some small impact with its program and Europe does have some larger projects under the global gateway for example it's constructing a sub-sea power cable from Egypt to Greece to transmit renewable energy from Africa to Europe the cost of the project is estimated to be around 900 million euro and for Africa working together with Europe certainly has its advantages African leaders that value sustainability and don't want to end up with failed Chinese projects could turn to Europe instead but the problem is that Europe doesn't have that much Capital with the six year long global gateway the European Union is already struggling to scramble 300 billion Euro for funding the project a lot of money needs to come from the private sector because the government simply doesn't have the resources there are several reasons for this one of the arguments is that the economy of the European Union is smaller than that of China the eu's economy amounts to around 16 trillion dollars in GDP while China has a nominal GDP of around 19 trillion but China's GDP figures are well disputed to say the least I've made a full video on that if you're interested what it comes down to is that China's GDP numbers could be much lower than expected so China's advantage in GDP numbers could be minimal or even non-existent nevertheless the European Union has one more disadvantage when it comes to these huge investment programs many see the European Union as a slow and bureaucratic organization this is because it is a union with tons of different member states in the organization every single country needs to agree with every single policy it makes when you're trying to organize billions of Euros for a project like the global gateway this becomes hard to execute the plan needs to go through several committees and councils which is a process that can take months to complete there are a lot of political differences within the European Union something that doesn't make cooperation go very smoothly in China however it's a whole different story China has an autocratic government in which Xi Jinping and the CCP just hold all the power now this has a lot of disadvantages when it comes to things like you know civil rights and democratic values and I'm not arguing that an autocratic government is any good but a foreign investment program like the Belton Road initiative is much easier to execute for dictatorships remember the CCP indirectly controls a lot of the Chinese Banks so it has access to tons of money Xi Jinping can access billions of dollars without having to go through the same procedures as the EU does and on top of that Xi Jinping has control over a lot of Chinese businesses so he can direct his resources top down and with his one-party State Xi Jinping isn't going to have any opposition against his investment plans anytime soon you can see why the European Union is having a hard time competing with China luckily for the EU though they're not the only ones trying to out-compete China in Africa we work together on building back better build back better to reset the clock and build back better than before better our economy and Society together we can fix this build back better in 2021 the G7 Forum launched its own infrastructure project to counter China's belt and Road initiative the so-called build back better world the b3w in short would provide hundreds of billions of dollars to underdeveloped countries the idea was that the project would help with financial Global infrastructure projects by giving out loans with low interest rates Africa with its huge infrastructure Gap was supposed to be at the core of the program the reason for starting the b3w appears to be simple countries like the United States Canada or the United Kingdom didn't want to stay behind on the huge Investments That China was making and just like the global gateway this new b3w program was value driven according to the G7 The Forum wants to focus on sustainability transparency gender equality and addressing climate change the G7 argued that this value-driven approach is what separates the b3w program from its Bri counterpart the focus on quality loans and not just the quantity of them could lead to better results but to make an impact on the huge infrastructure Gap in underdeveloped countries you need a lot of money the estimates are that Africa needs a hundred billion dollars annually to tackle its infrastructure deficit and the G7 isn't unaware of this but even the G7 as powerful as it is can't easily provide this amount of money that's one of the reasons why the b3w project never really took off the program stayed really vague and it hasn't competed with China's Bri in any way really China has built thousands of kilometers of roads and Railways in Africa something the G7 hasn't been able to even come close to the fact that the entire b3w project was renamed after a year says a lot in 2022 the US started a brand new and game-changing project with its G7 allies keep in mind this was just one year after the buildback better World program was launched the 2022 version was called the program for Global infrastructure and investment pgii in short this new program is mostly the same as the b3w just packaged under a different name the United States aims to mobilize 200 billion dollars by 2027 and together with other G7 Partners it will mobilize 600 billion dollars but it's uncertain if these goals will ever be achieved much of the funding will have to come 1:22:28 from the private sector the G7 won't actually provide these huge sums of money themselves but instead they look the banks and investment firms to help them out whether this will work out who knows in China the government can just force the banks to help the Belton Road initiative but whether the US can access Capital this way is well questionable but the fact that the b3w project kind of flopped it's not a great sign nevertheless it is clear that the United States and their allies are seeing the potential that underdeveloped countries and especially Africa have the G7 is trying to invest in the African continent to reduce the infrastructure Gap and to gain more influence the United States is also starting to realize just how important Africa will be in the future Washington is not only investing in infrastructure through the pgii but it's also looking to expand Mutual trade relations with the Prosper Africa initiative multiple U.S government agencies are working together to achieve this goal this project is connecting U.S businesses to the African markets by providing helpful services with the initiative the US government wants to spark private Investments imports and exports with the African continent through the private sector for example it has helped a Texas company win a contract with the government of Ghana if the United States succeeds in getting the private sector on board it will help with competing against China the US government can't launch massive programs as efficiently as the authoritarian CCP but it does have its good old capitalism and very powerful businesses if the United States can convince its businesses to help win influence in Africa the Bri has a serious competitor apart from the U.S the EU and China there are many other players looking to invest in the continent for example India and the UAE are combining their forces to invest in African infrastructure Singapore is also strategically investing in building up trade relations with their continent and other countries like South Korea Japan and the United Kingdom are doing the exact same the phenomenon is truly global so to wrap it all up Africa's demographics are truly going to shape the 21st century because of the advantages it gives Africa economically industrialization could be just around the corner up to this moment African countries have been underdeveloped due to several reasons the multi-trillion dollar infrastructure Gap is certainly one of them but soon this might change because other countries are starting to invest billions upon billions of dollars in the continent the reason for this is that everyone wants to be friends with African countries in the future after these nations industrialize it's crucial to have relations with them for economic and political reasons through providing loans and bilateral trade players like China the EU or the US can strengthen their ties with these African nations because of Africa's powerful demographics these countries are now willing to compete for influence with all the different programs and initiatives competing with each other the race for influence has only just begun and this geopolitical fight has the potential to shape the 21st century this video is brought to you by manscaped China is controlling America's weapons industry and dictating the pace to which the American Military can and will progress in a shocking move China just restricted the export of rare earth metals to the United States as retaliation for what the US did with the microchip scenario some weeks back this new restriction poses a new danger as advanced U.S weapons are almost entirely reliant on rare earth materials that are almost only made in China something that Beijing knows all too well what may come of this debacle is a hurting military a potential shift in geopolitical power and an angry United States that's out for blood and or Revenge the news coming out of Beijing might possibly be one of the biggest threats to World Peace at this present time China has decided to defend the export to America the toilet railroads medals gallium and germanium China is the world's largest supplier of both are crucial for the development of products such as semiconductors and solar panels electric vehicles the missile systems and some smartphones controls and the exports of key Rare Minerals that only it produces so let's get into details what are rare earth metals in the first place and why does everyone seem to want them so badly what does this China export ban mean for the United States and its allies and maybe most importantly what does this mean for the US Military and the geopolitics around it all these are very crucial questions that I'll answer today as we explore this very explosive topic as always your support with liking the videos and commenting is very much appreciated it's that support that gets me going even when the channel covers topics that are less than ideal for the algorithms and sponsors you know explosive topics I really appreciate my business Basics family now back to the basics so where to start with all this you see this month Chinese officials announced that the government will impose export restrictions on gallium and germanium products along with other Rare Earth elements that are used in computer chips and other components they say they are doing so to protect China's national security interests for most of us however we are seeing this action for what it is it's retaliation earlier this year the U.S limited its own exportation of high-tech microchips something extremely crucial for China and this left the Asian Nation out in the rain you can click on the link in the description to watch that video as part of retaliatory measures China has now cut something crucial for the us as well rare earth metals this export restriction which is going into effect on the 1st of August is going to critically affect the US given that China enjoys a global dominance in the production of these rare earth metals in fact rare earth metals are so far up China's field that the former chairman of the CCP party Deng Xiaoping once said the Middle East has oil China has rare earth metals only now are we starting to realize what the implications that such a monopoly has now that it's affecting geopolitics and the very fragile fabric of World Peace before we proceed I'm sure some of you are asking what are these rare earth metals anyway and how come China can dictate their production well don't worry I'll answer that for you we're doing geology 101 now these rare earth materials that we're discussing are a group of 17 elements used in products ranging from lasers and military equipment to magnets found in electric vehicles wind turbines and consumer electronics like iPhones basically any piece of important modern technology has these Rare Earth elements namely these 17 elements are lanthanum cerium prasiodymium neodymium promethium and I'll just put the rest on the screen they are quite a handful to name and sequence you know so yes these ones even though you might have never heard of half of these elements you really can't undervalue just how essential they are one might say they are the vitamin fuel for modern technology I mean think about it and let me repeat this for emphasis these Rare Earth elements are necessary components for more than 200 products across a wide range of applications especially high-tech consumer products like cell phones computer hard drives electric and hybrid vehicles and flat screen monitors and televisions these are things that everyday people cannot do without as even our militaries are very dependent on these significant defense applications for these Rare Earth elements include electronic displays guidance systems lasers and radar and sonar systems you see every military 1:30:20 branch from the Army to the Navy is in critical need of these Rare Earth elements and hence their importance it's critical to note that although the amount of rare earth materials used in a product like a fighter jet or a missile guidance system may not be a significant part of that product by weight or value or volume the rare earth materials are completely necessary for the device to function in fact in most products the rare earth materials often represent only a small fraction of the total weight but without them these spindle Motors and voice coils of desktops and laptops would not be possible all this said isn't it ironic that one nation that controls the entire world's supply of these is America's greatest modern rival China talk about the irony a question Still Remains though why China and why does only China have a monopoly on these rare earth metals to understand that we need to understand the formation of these elements you see rare earth materials were common when the Earth was accreting and so they are more abundant in the inner parts of the planet they concentrate on the surface only in places where mantle eruptions have worked their way up through the crust mostly in igneous materials but unlike more familiar Metals such as gold and copper rare earth materials don't Clump in single element chunks instead rare earth metals all weight together as hot rocks are crystallizing recoverable concentrations can be found in several minerals such as bastnocyte and monocyte the challenge with rare earth metals is that refining these minerals into individual elements takes many days of heavy processing therein lies the problem with these elements and metals you see it's not so much that they are rare but that they are hard to get this leaves very few places where they can access and process them the few being in China rare Earth mineral extraction is so hard on the environment for a number of reasons and hence its processing and even extraction is difficult few countries are in the place where they have the deposits the technology and the laws to take advantage of this firstly Rare Earth minerals are typically found in very low concentrations which means that a large amount of ore must be mined to extract a small amount of the desired mineral it's a whole needle in a haystack situation the needle is so valuable that you want it but you destroy mountains of hay just to get to it so in this way mining Rare Earth minerals can result in significant environmental impacts such as land degradation and water pollution that's why situations like these tend to develop another reason why rare Earth mineral extraction is difficult is because the minerals are often found in association with other heavy metals such as thorium and uranium which you know can be radioactive this means that special precautions must be taken to ensure the safe handling of these materials I don't need to explain what uncontrolled radiation can do to humans and the environment but just in case you were thinking of it it will turn you into the Hulk now I'm kidding that's just the movies the real effects are much sadder and fatal lastly the process of extracting Rare Earth minerals from ore is complex and energy intensive this can result in significant greenhouse gas emissions and other environmental impacts I think you're starting to see the pattern of environmental degradation here no wonder there is always Stark opposition to these mines whenever one is found much like in the situation here if the mind gets the go ahead the first thing that will affect us is dust followed by radioactive radiation those things will start from the first day of production and that's going to affect our water supply and that's only three kilometers away from the mining site meaning we won't be able to continue living in narsac as for why more countries are not mining Rare Earth minerals there are a number of reasons for this as well firstly many countries do not have the necessary infrastructure or technical expertise to extract these minerals I will dig deeper into this point in a few minutes and you will see why America handed China the Reigns to its own Doom Additionally the rare earth minerals are often found in remote or politically unstable regions which can make mining difficult and risky finally many countries are focusing on developing other sources of critical minerals as a way to reduce their dependence on imported Rare Earth minerals however it might be some time before these are viable enough to Dethrone the utility of the rare earth minerals themselves I mentioned before that the US might have given China the keys to this glorious Monopoly well they did the United States has one of the richest rare Earth mineral deposits in the world a mountain pass in California when this deposit was discovered it was all the rage but as interest and rare earth materials declined in the U.S in the late 20th century China's interest was heating up around this time Chinese scientists had visited during the Nixon Administration and taken their knowledge home applying it to their own Rich deposits as production growth abroad grew and mounting environmental pressures here in the U.S increased the production of rare earth minerals was shifted overseas to China where conditions were quote unquote better to top it off China also offered cheaper labor costs so it was almost a no-brainer by the end of the 20th century China was able to undersell the competition and drive most of the rest of the world out of the business in fact according to one 2018 report from the Department of Defense China strategically flooded the global market with rare earth materials at cheaper prices to drive out and deter current and future competitors let's just look at the growth pattern here very quickly in 1993 38 of world production of rare Earth elements was in China 33 percent was in the U.S 12 percent was in Australia and five percent each was in Malaysia and India several other countries including Brazil Canada South Africa Sri Lanka and Thailand made up the remainder however in 2008 China accounted for more than 90 percent of the world's production of rare earth metals and by 2011 China accounted for 97 of the world's production all these tactics and rates of progression have left China in a position of envy at present China enjoys a whopping large market share of approximately 90 percent of the production of rare Earth elements globally to break it down China is by far the largest producer of usable rare earth metals accounting for 60 percent of rare earth mining 85 percent of rare earth processing and 90 of high-strength rare earth permanent magnet Manufacturing this puts China squarely in a place where it can control the production of materials critical to Green Technology and modern day weapon systems the U.S for all of its might is completely reliant on China for these minerals that it desperately needs for its various weapon system programs high temperature magnets the production of which China owns a hundred percent is a major component of weapon systems that even the US can't do without this gives China a tremendous Edge in the game of geopolitics I'll dive more into that in just a minute what is clear to see is that China's power within the rare earth Market has created a supply chain dominance that has made it impossible for other countries to contend with them on any impactful level it is also given China's significant leverage over economic adversaries the truth of the matter is that China is so far ahead in the extraction and production of these Rare Earth elements that even if the US began to pour resources into these industries today it would still have to fight pretty significantly to even find footing not dominance just footing China's many years in the game has given it access to information knowledge and skill sets that are far beyond those of its fellow Nations that's why it's critical to realize that China's economic dominance in these markets doesn't come from the physical mining of tech Metals but instead from the refining and processing of them that information is the critical Bedrock of China's dominance they might not have all the world's deposits but they know how to best process deposits that are not even theirs let me give an example of what I'm talking about China doesn't mind any Cobalt but despite this it refines 85 percent of the world's Cobalt to add to that it also controls a hundred percent of the world's graphite production a necessary medal for electric vehicles all this just speaks to China's dominance of the industry what makes China's Monopoly of this entire sector scary is the insatiability of beijing's foreign policy in all fairness according to them it's simply protection of their own interests even if they clash with the rest of the world that playing out of foreign policy by different nations is what can result in actions such as what's happening right now for example China's retaliation came after the US government took certain steps what steps you ask these alarm bells are ringing in the United States this time on semiconductors U.S officials have ordered in chip export restrictions to China Washington has imposed sweeping controls on exports of semiconductors is quite as being harsh as the ban on China's high-tech industry ever implemented it all started on the 7th of October last year when the Biden Administration imposed a sweeping set of export controls meant to curb China's growth these included measures to cut off China from certain semiconductor chips and Chip making equipment something that is critical in the manufacturing of modern technology no 1:40:00 really microchips are essential in everything from your fridge to your very phone under these rules U.S companies were directed to see supplying Chinese chip makers with equipment that can produce relatively Advanced chips unless they first obtained a license it goes without saying that this license was and is still incredibly hard to acquire the new regulations imposed also added controls on some semiconductor production items and transactions for specific end uses of some integrated chips or circuits the US also wanted to increase its export controls to include semiconductor products and software technology and other things used to develop and make integrated circuits as a further restriction U.S citizens and green card holders have also been banned from working on certain Technologies for Chinese companies and entities basically Washington said if it's China it's a no this was Washington's own move to restrict China's growth China realizing what this meant has now decided to have its own Vengeance and hence it institutes its own bans on rare earth metals China decided to restrict exports with gallium or germanium two elements used to build computer ships minerals essential for microchips as well as electric vehicles Fiber Optic Cables China produces 95 of the world's Supply now that China has played this hand it has become increasingly apparent to the US and her allies the China can weaponize access to its Rare Earth minerals whenever it chooses to do so This Thread is now pushing Western countries to find new sources of supply and Alternate Solutions given the severity of this matter this ain't the first time China has used The Rare Earth elements to its Advantage it first happened in 2010 so let me take you back in September of 2010 a Chinese fishing boat rammed two Japanese Coast Guard vessels in the contested East China sea Islands the Japanese government announced its intention to put the fishing boats captain on trial given that he was assumed to have been drunk and hostile when the event occurred seeing this the Chinese government retaliated with several measures that included an embargo on Rare Earth sales to Japan this could potentially have had a devastating effect on Japan's Industries given that at a point they were 100 reliant on China's Rare Earth elements their Auto industry in particular relied big time on the cooperation they had with China as where Earth elements are a crucial part of catalytic converters of engines China proceeded to threaten a limited supply of rare earth metals to the rest of the world this threat was taken seriously enough that the United States the European Union Japan and several other nations filed suit with the World Trade Organization in protest the World Trade Organization then ruled that China could not put limits on Rare Earth exports for the benefit of other Global economies this ruling however was not immediate and it did not occur until four years after the filing and by this time the Chinese foreign Ministry was denying that it had imposed an embargo saying that China needs more rare earth minerals for its own developing Industries which in all fairness were growing pretty exponentially this fact may be supported that even before this by 2005 China had been restricting exports causing concern in the Pentagon about shortages of four rare earth metals namely lanthanum cerium europium and gadolinium that were causing delays in producing certain weapons however in light of China's other actions it's hard to tell even when China was forced to export rare earth metals it still worked against the rest of the globe this is because China then flooded the market with cheaper rare earth metals and forced all the upcoming Industries and other nations to close down as they simply could not compete with the Chinese prices this increased China's Monopoly making it even more concentrated than before as several Nations now relied on them back to the cause of this the 2010 Japanese dispute although Japan later released the Chinese Captain this incident alerted Japan that it had to find other ways of obtaining rare earth metals within weeks of the incident Japanese experts were visiting countries with other significant Rare Earth Resources such as Mongolia Vietnam and Australia to make inquiries by November of 2010 Japan had reached a tentative long-term Supply agreement with Australia's Linus group Japan now obtains 30 percent of its rare earth metals from Linus interestingly state-owned China non-ferrous metal mining had tried to purchase a majority stake in Linus only the year before given China's own large deposits of rare earth it's easy to see that this purchase was spearheaded by China's own desire to Corner the World Market for Supply as well as production the Australian government blocked the sale to prevent that from happening this was one of the first signs of other nations retaliating and lashing out at China's Monopoly for the United States the issue of rare earth metals arose again in the context of the U.S China trade war in May of 2019 China's leader Xi Jinping paid a well-publicized and highly symbolic visit to a rare Earth's mine incheongshi that was interpreted as highlighting The Leverage his government has over Washington lest the implication be missed renmin ribao the official newspaper of the Chinese Communist party's Central Committee wrote we advise the U.S side not to underestimate the Chinese side's ability to safeguard its development rights and interests don't say we didn't warn you pretty direct threat don't you think observers noted that the expression don't say we didn't warn you is typically used by official media only for very serious situations such as in 1978 before China invaded Vietnam and in a 2017 border dispute with India to add to American concerns as more advanced weapons are developed which is constantly happening with the US military more rare earth metals are needed metals that are almost entirely owned by their greatest rival since the Cold War let me put this into context for you to understand it better for every F-35 fighter jet to be made it requires 920 pounds of rare earth and each virginia-class submarine needs 10 times that amount about 9 200 pounds given that the US and its ridiculous budget are constantly adding more weapons to the Arsenal we simply need more rare earth metals now than ever before China knows this and hence the interference the Pentagon knows its compromised position hints actions like this along with other countries recently Japan has been exploring the possibility of tapping into deep undersea Reserves these nations are just desperately grasping at alternatives to try and have a foothold in the industry so that China doesn't dominate the industry going into the next few decades but certain facts of this situation are hard to deny and this is why it might keep the balance of power skewed as eager as Nations like the US and Japan are to topple China it simply isn't that easy a big part of that is because the extraction of rare Earth elements is not easy at all extracting rare earth metals is truly a difficult process due to a combination of environmental Technical and political factors many regions including the European Union have an abundance of these resources but lack the expertise that other countries like China have in the processing and magnet production let's start with the environmental problems The Rare Earth elements industry has come under Fire for environmental concerns many Rare Earth elements reside among mineral deposits with radioactive materials that can leach into the water table mining processing and Disposal can also contribute to ecosystem disruption and release hazardous byproducts into the atmosphere Japan is the perfect example of this the nation made a discovery as it found over 16 million tons of rare earth materials hidden Beneath the Sea bed in the Western Pacific Ocean this amount of rare earth metals would provide a significant breakthrough to Japan's current dilemma it's not that easy though at least not yet despite being in possession of such deposits Japan simply does not have a safe and effective way of extracting these minerals the minerals are buried 6 000 meters deep in the ocean making their extraction difficult while the Japanese researchers who discovered the deposits claim they also have created an effective method to extract these minerals questions remain as to how this method could be scaled it goes without saying that to mine such a deposit would need a scalable large-scale safe extraction method and currently there are no profitable methods of producing Rare Earth minerals embedded more than five kilometers below the seabed based on current methods producing only a thousand tons of metals would require mining more than one million tons of mud to extract rare earth metals with present technology a device called a piston corer collects mud from the stratum under the 6000 meter deep sea floor the process is agonizingly slow since the corer takes over 200 minutes to reach the sea floor reaching and then extracting the mud is just the beginning of the refining process and other concerns impinge as well there are potential dangers to the environment with several scientists concluding that the seabed stratum could collapse due to the force of the circulating water spilling the drilled rare earth materials and mud into the ocean commercial factors must also be considered too because you see 3 500 tons need to be collected daily to make the business profitable because at the end of the day all this is being done for profit at present only 350 tons can be 1:50:04 collected in a 10-hour day using current technology the effects that could have on the ecosystem are devastating so what Japan is struggling with is a perfect illustration of industry-wide challenges that nations are facing extracting Rare Earth minerals from whatever Source be the land or the sea is time consuming and expensive China on the other hand controls nearly all of the world's processing facilities with even rare earth metals taken from the ground in other countries being sent there for refining as they simply do it best seeing all of this and how vulnerable it is the US is making strides to advance the rare earth supply chain and develop alternatives to mining rare Earths as environmental regulations are often more stringent than inside of China this then limits the US in terms of what they can do in a similar fashion in recent years linas and Australian rare Earth's mining company with two major operations came under scrutiny from activists and the Malaysian government for radioactive waste that it produces as part of its enrichment process Linus has said that the low levels of radioactive waste were not dangerous Malaysian government ultimately renewed the license and greenlighted a construction plan for a permanent disposal and waste treatment facility in August of 2020. such things highlight the hurdles presented when such operations are conducted outside of China to maximize benefits and limit challenges some companies have proposed extracting rare Earths from coal While others suggest setting up a system for recycling old batteries or disk drives suggestions include calls to utilize shipping services like Amazon or USPS to set up a recycle system but these Endeavors can be costly they are also riddled with several other flaws which make them unsuitable for use at the present moment recycling of key raw materials used in the electric vehicle space is receiving greater investment Focus some emerging battery recycling leaders including Redwood materials a startup from former Tesla CTO JB Strobel and life cycle which recently announced plans to go public through a SPAC merger here in the US the Ames laboratory in Iowa is one of many Department of Energy's National Laboratories working on projects aimed at substituting rare Earths or finding new more eco-friendly methods to recover them one initiative is a rare earth magnet recycling process designed to recover Rare Earth oxides without the Hazardous acids or fumes associated scientists are also using the process to recover byproducts like copper nickel another laboratory in Idaho is looking at how potato Wastewater can be used as a cheap food source for bacterium that can assist in recycling rare Earths so you see diversifying the sources of rare earth metal purchases may prompt A Renewed debate about the environmental consequences of rare earth metal processing which creates toxic waste and has a high risk of causing damage to both the environment and to human health these realities are embarrassing to those who Advocate the use of Technology like wind turbines and electric vehicles to save the environment well because of the implications that rare earth metals have in the process is it really renewable and eco-friendly if the process of making the same equipment devastated the environment if China is no longer willing to do the world's Dirty Work what will happen is that we may find ourselves with a national and Global debate on the dangers and downsides of rare earth processing China by itself may use its investments in the rare earth industry to move the dirtiest parts of production to locations outside of China but still under Chinese Financial control thus relocating the pollution to poorer countries this keeps part of the dirty work out of their hands but the profit and control firmly grasped by Beijing in line with its restrictions on the exportation of rare earth metals if China makes good on its threats we should expect the price of rare earth metals to rise even if the sanctions do not work to prevent the US from Gaining access to rare earth metals they will likely lead to supply chain issues and Rising costs the same is true if we start to process these Metals domestically this means higher prices for Western consumers and that includes everything from smartphones to Green energy should beijing's threat be fulfilled ramifications will be felt well beyond the corridors of Washington what this means is that we might have to brace for a potentially more expensive future does that then mean there is no future in rare earth processing without China no in the long run monopolistic Behavior will be solved by the interconnected markets on which modern society is built the narratives between great Powers may be swiftly changing but the fundamental rules of how we all operate stays the same if Beijing keeps calling these Bluffs and using the weaponization of the rare earth industry the more likely that pressure will be applied on the two competitive market forces already working towards Solutions we have already intensified these factors in the last couple of years what are these factors then well the first is the potential for New Market entrants rising Chinese export tariffs and spiking prices signal opportunity Canada India and the United Kingdom have all recently announced their intent to develop their first domestic refineries for Rare Earth elements with National Security interests undoubtedly providing propulsion if you threaten people for long enough it should not be surprising when they start to look for solutions that don't involve you and as much as these nations cannot match what China has invested in this industry as of now relatively small Investments now could pay off big by shaking up market dynamics later this decade this is why the United States could cede promising Ventures abroad and consider this high-profile sector an opportunity to build up friends Shoring Partnerships with alternate producers think of the old adage an enemy of my enemy is my friend while China is the universal enemy in this the second factor is the threat of substitutes necessity is the mother of invention and if substitutes can replace rare Earths in end-use products then Supply fears may be sidestepped the embedded risks of the elements have already been driving manufacturers like Toyota and Volkswagen to redesign their electric motors magnets to use less Rare Earth material or use alternative magnet materials if these two factors can be developed along with the Necessary Technology the world would be less reliant on China and hence China would have less of an advantage in this the US for one would prefer alternatives to rare earth metals given its current Reliance on China the US Energy defense and commerce departments have been pursuing Alternatives but governments should also consider rewarding companies that find innovative ways of Designing their products without Rare Earth elements in the style of bug bounties even without implementing substitutes establishing backup options build supply chain resilience and saps the power of a monopoly that has to be a future Focus Tetra tonight is one promising breakthrough in magnetic Alternatives until recently this nickel iron alloy was only observed in meteorite samples but last year it was successfully replicated in a University of Cambridge Laboratory experts say it has an outside chance of upending the entire Rare Earth industry in the years to come aside from pressing into the two competitive market forces of new entrants and substitution the United States should continue subsidizing the rapid development of its Rare Earth Supply chains particularly the Midstream layers or processing mineral refinement and alloying the faster it can do so the more narrow the window will be for president Xi Jinping to play hardball during the waning years of China's Monopoly and the less likely that opportunity will coincide with an attempted invasion of Taiwan yes rare earth metals also coincide with the invasion of Taiwan China has made it no secret that it wants Taiwan and the more dominance it has on the global stage the more it can run wild with its ideas and agendas what is abundantly clear to the US and all the other countries in the global economy is this president XI jinping's wolf Warrior diplomacy is not sustainable and unless Solutions are found to curb the rare earth Monopoly that China is currently enjoying there is trouble up ahead only time will tell if truly China can be dethroned or if indeed China's restrictions will give them even more power and strength on a global scale while most of the world is grappling with inflation China seems to be experiencing an altogether different challenge deflation a nation that was once the epitome of rapid growth and expansion is now facing stumbling blocks that are sending shock waves through its 18 trillion dollar economy deflation is a term that might sound a bit confusing at first but we'll break it down for you I think it's inflation as the opposite of inflation inflation is when prices for things like goods and services go up over time deflation on the other hand is when those prices actually start to decrease now while this might initially make you feel like your money can buy more it's important to realize that deflation isn't always a positive sign deflation can be a signal of economic trouble when prices fall too much and too quickly it can lead to a chain reaction of problems businesses might struggle to sell their products because people start waiting for even lower prices as a result businesses might earn less money and might even need to cut jobs to stay afloat this in turn can lead to fewer people spending money which can eventually slow down the economy before the emergence of covid-19 China was facing a big change in its population in the years before 2021 the number of babies being born dropped by a staggering 40 percent this is really important effects and we can't ignore them this situation is also connected to China's past policy called the one child policy which influenced the number of children families could have key to a strong economy is how people spend their money but with fewer young adults 2:00:01 entering the stage of buying homes cars and raising families the foundation of economic Vitality gets shaky China had trouble keeping up with how much people were buying compared to how much they were making they thought more people would buy things after kova 19 but that didn't happen and then unexpectedly there were problems with trading between countries which led to an overabundance of goods both in China and abroad in July the Consumer Price Index or CPI gives us a sneak peek into how consumer goods are priced it's like a thermometer for inflation the recent news from China is that the CPI has fallen by 0.3 percent year on year that's less than was this time last year the producer price index fell for the 10th consecutive month down 4.4 percent a sharper decrease than anticipated in more simple terms stuff like food clothing and transportation is becoming cheaper now this might sound like a bargain but it's actually a red flag for the Chinese economy when prices drop people tend to buy less and when demand Falls it ripples through the economy here's the domino effect falling demand means factories produce less and that's where things start to get tricky fewer Goods produced means fewer jobs created layoffs become all too common and Investments start to dwindle it's a snowball effect that leads to economic stagnation unlike other economies heavily reliant on consumption and exports China's growth engine has long been fueled by investment facilitated by Massive borrowing for infrastructure and Industrial projects using money for Investments to make the economy grow can't last forever the problem is that China has nearly used up all the ways to make more things efficiently this means that the benefits from investing are getting smaller which has created a difficult economic problem that needs new and creative Solutions recent trade figures for July revealing a decline in both exports and imports further amplify concerns however the Chinese authorities are downplaying the notion of deflation asserting that there are no deflationary risks for the latter half of the Year people are afraid that China might experience a long time of slow economic growth similar to what happened in Japan's lost decades in Japan prices and wages didn't increase for a long time and this situation could affect the whole world even though the Government tried to make the economy better it hasn't worked very well yet the global Market's mistrust in China's policies and the ccp's erratic Behavior has culminated in a declining willingness to invest once a hub or foreign Enterprises China now finds itself shunned as foreign investors withdraw and seek more stable ground elsewhere but let's zoom out for a second China isn't just an economic Powerhouse for itself it's a major player on the global stage from energy to raw materials to food China's the go-to market so when China's economy starts to hiccup the rest of the world Fields it think of it as a chain reaction China Imports less other countries take a it and a ripple effect sweeps across the global economy you might wonder how did China get here this wasn't an overnight tumble earlier this year China set a goal to keep inflation at 3 percent but alas that's not what happened inflation plummeted into a negative territory to counter this the Government tried everything from stimulus packages to slashing interest rates but the cracks in the dam were already too deep and here's where things take a Twist Chinese officials seem to have gone silent meetings declined Communications curtailed and opinions suppressed why well a new anti-espionage law looms over them this law was launched this June which places a veil of secrecy over every move it's like the officials have been sent back to school with mandatory training on how to keep a secret but what are the consequences of this newfound silence for starters foreign direct investment has hit a 25-year low the uncertainty has made investors wary and China's once trusted growth story seems to be losing its Sheen this isn't just about economic numbers it's about trust the trust that China has earned on the global stage now let's take an in-depth look at a few factors that are compounding this economic deceleration first on our list is the turbulence within the real estate market China recognized the emergence of a property bubble several years ago and swiftly commenced efforts to deflate it however the speed of this intervention has outpaced the economy's ability to recalibrate culminating in a sharp Plunge in home prices in the year 2023 China is a country where real estate contributes to a whopping 30 percent to its GDP and nearly 70 percent of people's wealth is tied up in property it's a nation where home buyers and a unique twist often pay Upfront for projects that are still under construction China's real estate landscape has been going downhill for a while it all started with the collapse of ever Grande group the second largest real estate developer drowning in a staggering 300 billion dollar debt as the dust settles the latest Grim news comes from Country Garden once the leader in sales it's now teetering on the edge missing payments on massive dollar denominated bonds this has triggered alarm Bells about the widespread debt crisis plaguing Developers for decades the Chinese saw real estate as the ultimate safe investment much like the middle class anywhere else in the the 90s a property frenzy swept the nation prices skyrocketed and developers expanded left and right but here's where things took a turn no one saw coming debt by 2020 the Chinese government decided it was time to hit the brakes on easy credit for property developers it was a Crackdown that aimed to put the brakes on the unbridled expansion but as they say what goes up must come down the sudden halt led to a cash crunch unfinished projects and developers struggling to meet their debt obligations cut to last year and a unique Rebellion took root home buyers from over 300 housing projects across 100 cities protested by refusing to pay mortgages for their unfinished homes the Chinese government stepping in with Solutions their extending support for developers until the end of 2024 in cities like zhen Zhao are relaxing purchasing rules to stimulate demand but all lies are on one company Country Garden will it survive the storm the second factor is about China's banking crisis and local government being in too much debt traditionally a financial crisis is marked by bank failures triggered by Massive deposit withdrawals leading to a domino effect that can shake an economy between core yet China has managed to sidestep the scenario leaving us to wonder what's keeping its banks afloat if we take a closer look at the numbers Western economists have repeatedly pointed out a seemingly unsustainable debt level in China's Financial system raising alarms for nearly two decades but here's the catch despite these warnings China's Financial system hasn't crashed as anticipated the question is how is this possible on one side a lot of money from Banks is going into companies that aren't doing well and government projects that don't make sense this makes a lot of bad debt on the other side some rich and powerful people are taking money from banks for themselves the government focuses on keeping things stable even if they're not fixing the real problems speaking of stability the ccp's methods for reverting runs on deposits are nothing short of drastic mobilizing police military and even resorting to force have been witnessed as demonstrated in the shocking events of May 14 2023 when over 1300 police officers were deployed in xinjiao city hinan province to maintain order amidst contented depositors but can someone who put their money in the bank just sue the bank if someone goes wrong in theory yes but in reality it's like a small person fighting against a big giant Banks such support from the government which makes it really hard for normal people to win many people have lost their savings showing that fairness is hard to find as of 2021 China has a huge number of banks 4602 to be exact many of these are small banks that are at high risk of failing China's Financial system has a lot of hidden bad debt something called Shadow Banking and relies heavily on the real estate market this is like a time bomb that could affect the whole world on July 11th it was said that the value of China's banking companies dropped a lot the biggest drop ever a special index that shows how well Chinese banks are doing fell by a big 14 from its highest point this year taking away a massive 77 billion dollar from their total value big financial company Goldman Sachs made things worse by saying that major Chinese Banks weren't doing well this caused uncertainty around the world Goldman Sachs made a big report about 12 Chinese banks that are on the stock market five were labeled as cell including powerhouses like the Industrial and Commercial Bank of China ICBC agricultural Bank of China Bank Communications and China Minh Shang banking Corps meanwhile three were rated as neutral including the Bank of China China Merchants Bank and Nanjing Bank the rest China construction Bank postal Savings Bank Nimbo bank and ping and Bank earned a buy rating the report underscored China's Rising local government debt and credit portfolio losses these growing concerns pose a substantial risk to bank profitability and could earnings growth and dividend payments Goldman Sachs also estimated that China's local government debt has surged a staggering 11.14 times between 2008 and 2022 as local governments grapple with these mounting debts they've resorted to several Desperate Measures such as refusing to repay debts many local governments have defaulted on payments for Vital infrastructure projects causing chaos and uncertainty amongst contractors and local businesses implementing tax increases pay cuts and even layoffs reducing exponentials on social welfare programs and diverting funds lastly leveraging Hefty fines to generate Revenue the Chinese Communist Party seems to be looking towards state-owned Banks to bail out local government debt this strategy might provide temporary relief but comes to the cost of jeopardizing bank's profitability and economic stability the third factor is unemployment China's rapid pivot towards high-tech domains and advanced manufacturing has birthed the need for specialized skills however this transition has outpaced the evolution of the education system causing a conspicuous gap between the skill sets possessed by the youth and those demanded by the dynamic job market the repercussion China's youth find themselves shouldering the weight of the economic Resurgence with youth unemployment statistics Define the overall jobless rate by a factor of four a convergence of escalating living costs salary misalignments and Regulatory constraints has added fuel to the fire a distinctive Trend emerges in response to the urban employment crisis an unforeseen reverse migration the once predictable flow of Youth from rural to urban areas has reversed as young graduates now Breathe new life into rural regions fostering entrepreneurship and Innovation government-backed initiatives to enhance a rural infrastructure ensure Urban Comforts reach these vibrant pockets this big change can make China's economy different but experts urge caution even though rural areas are getting better they might not be able to give jobs to all the young people looking for work according to the National Bureau of Statistics the youth employment rate in urban areas hit a staggering 20.4 percent in April the highest since records began in 2018. this is a worrying sign especially with nearly 12 million college graduates expected to enter the job market soon these numbers are official so it's safe to assume that the real unemployment rate is likely to be even higher it's not just about a 2:10:05 lack of opportunities even highly educated individuals are feeling the heat graduates from prestigious schools and seasoned professionals are struggling to secure suitable jobs discrimination based on age and experience levels further exasperates the issue there's this idea of a four nosed life no dating no marriage no buying homes and no having children it shows how frustrated and helpless many young Chinese people feel about their future in an uncertain economy people are not following the usual life steps because they don't feel like they can in this situation places that were busy with stores and businesses are now empty from Shenzhen to Shanghai businesses are having a hard time because the economy is not doing well the ripple effect is undeniable however China's future isn't only decided by choices made within its borders the way countries interact with each other also has a big influence the ongoing tensions between China and the US create an unclear future for the economy this affects things like trade and the ability to use Advanced Technologies in response many western visales states are pivoting away from China in terms of Supply chains potentially disrupting China's role as a manufacturing Hub China's economic deflation isn't just about prices falling it's a symphony of interconnected factors with repercussions echoing worldwide as China's economy navigates these challenging Waters the rest of the world watches closely because in our interconnected world no economy stands alone thank you for watching until we meet again after watching our videos or other YouTubers videos we're sure some of you guys have thought about starting your own channel one of the biggest hurdles people face when starting a YouTube channel is that they are not comfortable showing their face on videos not everyone wants to give up their privacy and be in the public eye all the time that's one of the big reasons why our videos are made in documentary style that's also why we launched a free five-day email course on how you get started and grow your own channel without having to put yourself out in public if you're interested you can sign up now by clicking the link below or scanning the QR code on screen China's hegemony not only in Asia but in the world is ended a lot of factors that the coveted pandemic and the Chinese Communist party's own hostile foreign policies have contributed to the mix of the decline of the Chinese Empire One Nation however has emerged as a beneficiary of China's woes and an accelerator of China's problems Rising the glory in the wake of China's burning ashes that nation is none other than the Asian country of Vietnam Vietnam is emerging as a low-cost alternative to China the opportunity in Vietnam is uh is huge it's November 2022 we see a huge amount of foreign investors coming back to the market with a plentiful Workforce the government opened its doors to high-tech companies looking to bring them from China where a worker's average salary is three times that Vietnam when you consider the rating of which Vietnam is on it's very effective market for the long term Vietnam which is one of 12 nations in the pack is positioned to hugely benefit economically the agreement could also loosen Vietnamese ties with China the world is now abandoning China as companies like Nike Adidas and Samsung are choosing Vietnam over China it legitimately seems like China's day in the sun is over and Vietnam's Glory Days are just beginning in today's video we will be going over exactly why this is happening and how Vietnam is checkmating China we will discuss Vietnam's rise to power and the factors that have given it an edge over China in recent years lastly we will discuss China's role in all of this and if truly the Great Dragon of the East is down for the count or if the world's media is rushing to make an early verdict on a battle that still has life in it so without taking much time let's get into it as we do that please take a second to like this video and drop a comment on the next topic you'd like us to cover by liking the video you can help push the ever hostile YouTube algorithm in our favor these videos take time and effort to make so your response as a community means a lot to us something we're grateful for okay now let's get to talking about Vietnam we know some of you might be surprised to hear that Vietnam is well on its way to becoming a global economic giant but to be fair this was a long time coming Vietnam has always been living in the shadows of other Asian Nations like China and India but that's not to say it hasn't been if not more Progressive with its economy in the past 30 years alone the nation has undergone a transformation and poverty reduction has played a fundamental role in bringing the nation to where it is today as reported by the World Bank the poverty headcount in Vietnam fell from nearly 60 percent to 20.7 percent in the past 20 years that is miraculous growth if nothing else from within the Shadows it seems like Vietnam has quietly transitioned from being one of the poorest Global economies to one of the fastest growing with room for even more growth let's trace this progress path now shall we most people especially here in the United States are only familiar with Vietnam because the Vietnam war that went on from 1954 to 1975. the war was a long drawn-out conflict that pitted the communist government of North Vietnam and its allies in South Vietnam known as the Viet Chong against the government of South Vietnam and its principal Ally the United States the war ended up being a proxy war between Russia and the U.S in what was almost an idealistic War a Battleground for the Cold War most Americans will remember it as a costly Affair that showed the fighting Spirit of the Vietnamese people even against a superior power well after the U.S military retreated from Vietnam in 1975 the country's economy experienced severe developmental issues resulting from the inefficiencies of a centrally planned economy residual War effects and low productivity rates that made it import dependent these issues stifled growth making the Asian Nations suffer economically on top of all the instability that came with Decades of post-war fever to add to that boiling mess of Hot Cheetos Vietnam's invasion of Cambodia in 1979 to remove the kymer Rouge government complicated the economic woes the country was already suffering from by redirecting resources to the war effort these are resources that the struggling Nation could have used for its people but no they were being used to fund yet another War as a result of this Vietnam faced the Wrath of the International Community which condemned such actions in fact the U.S went as far as to impose sanctions a situation that only served to further collapse the Asian Nation all these economic deficiencies and Global tensions resulted in Vietnam's economy being one of the poorest in Asia with a GDP growth rate of 2.8 percent in 1985 and a 378 inflation rate in 1986 one could say that reaching this bottom barrel of poverty is one inspired change to come this is because in 1986 the Vietnamese Communist party or vcp as we'll be referring to it set out to transform its economy we suppose they woke up one day and decided that enough was enough and that it was time for a change the vcp then shifted the economy from a centrally planned model to one that utilized Market forces to allocate resources the reforms popularly known as domoa encouraged Private Industry recognized private land rights and abolished Collective farming the main thrust of the domua was to promote a multi-sector economic system emphasizing the state sector while encouraging the private sector to achieve economic integration the open door would be implemented gradually in order to stabilize the political and social situation domoa in its early stages was focused mainly on the removal of self-imposed barriers to progress and the utilization of various market-oriented measures including liberalization of the domestic Market encouragement of foreign District investment and the private sector and reduction in subsidies to state-owned Enterprises these changes along with Vietnam's military withdrawal from Cambodia in 1989 set the country on a course toward one of the quickest and most impressive periods of economic development in world history an achievement whose successes we are discussing now in 1986 when the vcp first implemented these reforms Vietnam was one of the poorest countries in the region with a poverty rate above 70 percent that means that over 70 percent of the nation's citizens were living in abject poverty that's one in every 10 people that is quite the number however by 2020 this rate had declined to five percent as in 0.5 people for every 10 that is quite an improvement also as a result of the reforms Vietnam went from a country faced with Perpetual food shortages to in 1989 for the first time exporting 1.4 million tons of rice it has since remained a rice exporter in 2008 it exported 4.7 million tons becoming the world's second largest rice exporter after Thailand indeed Vietnam's exports were instrumental in stemming the threat of a severe International Food crisis in early 2008. Vietnam hasn't looked back since with it in 2022 being the third top rice exporter in the world it's very clear to see that the vcp's reforms have had such an impact on the nation looking at the numbers you can see that in the 2010s alone over 10 million people were rescued from the jaws of poverty by these vcp reforms in less than the 30-year period as well the country's GDP per capita also increased nearly tenfold from under 300 in the 1980s to two thousand eight hundred dollars in 2020. let's be honest if the world was a classroom Vietnam would definitely be getting the prize for the most improved student a lot of factors over the years have contributed to Vietnam becoming what it is today and all this has led to the nation becoming one of the best investment places of the new age the small nation has become a key part of the global supply chain for textiles becoming an alternative in some cases a better one to Nations like China and India the manufacturing capabilities of Vietnam have been so great that Footwear and textiles made up 18 of its exports in 2018 while electronics and electrical equipment made up 40 percent this number has only risen getting higher and higher over the years as this number has risen so is Vietnam's relevancy so far as manufacturing is involved this relevancy has been so much so that major companies like Adidas Nike and Samsung among many others now have a manufacturing presence there as a result of this it is no surprise that Vietnam's foreign direct investment has grown over 2:20:16 200 times since 1986 from forty thousand dollars in 1986 to run 15.8 billion dollars in 2018 meanwhile its exports increased by 19 from 2020 to 2021 and have only growed higher to date Vietnam's growth in the region is now directly affecting and competing with China the world's current biggest manufacturing Hub Vietnam has been growing at a steady pace and in Silence with its own economic growth eclipsing China in relation to its own economy that means that even though China still outpaces Vietnam by far Vietnam's growth rate has been higher than China's and higher than any Asian Nation overall take a look at this table of growth projections in Asia Vietnam leads the pack while China's own growth is slowing down there almost seems to be a direct inverse correlation to the success of Vietnam and the misfortunes of China it seems that as China slows down and loses out on growth Vietnam is growing and developing more is there a direct relation well we think yes and no let us explain firstly the yes part an undeniable fact of the matter is that part of Vietnam's growth a huge part of it is due to the great power competition between the United States and China the rising tensions between the world's two most powerful countries the United States and China came on here a trade war between the United States and China is here it's real at the stroke of midnight the U.S hit China with tariffs on 34 billion dollars worth of goods a battle between China and the U.S over the self-governing island nation could result in devastating Mutual losses that we don't have trade which we don't have anything near free trade with China we've we've opened up our markets to the Chinese for 25 years this is my point tensions between China and the United States as I mentioned are running High the defense Chiefs are in the water world it's China's world and you know what it's not Joe's fault that it came here either it's China's fault you see in the past couple of years as the tension between the United States and China has grown the Chinese Communist party has taken a Less business friendly posture American businesses operating within China have found themselves on the short end of the stick as they have faced tons of retaliatory measures from the Chinese government almost as a punishment for the U.S government hostilities let us give you a simple example after Micron an American tech company were buffed a 2015 takeover attempt by a Chinese state-owned company it washed with disbelief as its Innovations were stolen and copied by a Chinese competitor and its business was blocked from China it is China's treatment of American companies like Micron that contributed to former U.S president Donald Trump's decision to unleash a punishing trade war with the world's second largest economy a fight he said would halt beijing's use of unfair practices to undermine the United States another example is the Marriott Hotel incident an incident that shows that China has and will retaliate against companies is displeased with after Marriott had referred to Taiwan as a separate country on its website the Beijing government shut down its online reservation site in China for a week the company then had to issue an apology in an attempt to rectify the matter the chief executive Arne Sorensen wrote in a statement on the company's website saying Marriott International respects and supports the sovereignty and territorial Integrity of China we don't support anyone who subverts the sovereignty and territorial Integrity of China and we do not intend in any way to encourage or incite any such people or groups we recognize the severity of the situation and sincerely apologize these are all examples of how the Chinese government could easily and has been making life difficult for American companies things like slowing down the permitting process for new stores or imposing stiff fines for minor infractions have not been known to be foreign add to the mixture the harsh zero covet policies that China has been putting into place and what we have left is nothing short of a horrible business environment for most companies particularly U.S ones this has left companies feeling limited insecure and seeking alternative Supply chains in a bid to reduce risk if and when any disruptions occur Perhaps it is no wonder then that in 2021 alone more than 11 000 foreign firms canceled their company registration in China that's a big number others like Apple Samsung and Hasbro which have had significant and long-standing Manufacturing operations in China have decided to reduce their operations in the country and you know who they turn to in all of this sweet reliable Vietnam all this makes us think that Vietnam is the sweet best friend who capitalizes when a toxic couple breaks up and then ends up getting the girl you know your typical rom-com plot in this case Vietnam got the U.S or rather a good portion of the business that the U.S was giving China Vietnam has really benefited as major companies have moved their manufacturing there to take advantage of the low costs developed infrastructure supportive business environment and success in mitigating the economic effects of cover 19. for instance Foxconn The prominent electronic manufacturer that contracts with all major technology companies including the Behemoth Apple announced it would invest 300 million dollars in a new Factory in Northern Vietnam another giant Google has announced recently that it plans to ship as much as half of the production of its pixel phones to Vietnam while Microsoft has utilized Vietnam for some of its Xbox production a few years ago these corporations would have exclusively produced these items in China but now be Vietnam is getting a big piece of the cake the fact that these companies are also investing in factories and the like in Vietnam means that this is not a fad but a long-term commitment that will only serve to benefit Vietnam War as the years progress the Asian nation's growth however had not just been due to the U.S China trade deficiencies there have been other pull factors that have made Vietnam an attractive Choice let's get into those shall we smartphones and other gadgets are manufactured in China these days but what about Vietnam Vietnam's economy jumped by eight percent this year the PVH is even the Adidas's in the Columbia sportswears they've all sourced product out of Vietnam and they have been doing that for years it's emerging as an alternative to China with its tax incentives and cheaper Workforce U.S is importing 40 percent more from Vietnam than this time last year while imports from China down 13 percent okay we've warmed you up on the successes of Vietnam so we know you're asking yourself now saying how did this growth Miracle happen other than the opportunistic approach it took with the U.S China trade War Vietnam has had other factors accelerate its growth analysts from the World Bank think that the nation's entire growth can be condensed together into three main factors factors we're about to dive into right now the first of these factors is the simple fact that due to the vcp's policies Vietnam has thoroughly embraced trade liberalization with gusto with 95 percent of Vietnamese people agreeing to say that trade is good in a 2014 Pew research survey it makes sense that the people think so because trading globalization have been incredibly good for the nation Vietnam's exceptionally globalized economy is a result of its focus on exports for economic growth over the past 20 years Vietnam has signed numerous free trade agreements in order to become a contender on the global stage in 1995 Vietnam joined the asean free trade area in 2000 it signed a free trade agreement with the U.S and in 2007 it joins the World Trade Organization since then further a sea in agreements follow with China India Japan and Korea and recently the amended trans-pacific partnership went into effect these agreements were made with the hope of gradually lowering the terrorists imposed on both imports and exports to and from Vietnam thereby making it more trade friendly and making the trading itself cheaper to do suffice it to say this has worked out quite well like China before it Vietnam has opened up its cheap labor market to foreign investors and become a hub for low-cost manufacturing the country is now a major exporter of electronics and apparel with the United States and China as the main destinations for its goods in order to make those goods Vietnam is a major importer of machine parts and natural resources from South Korea and China all this has seen Vietnam's GDP per person grow from about 1 500 in 1990 to about six thousand five hundred dollars today quite the significant rise if we do say so ourselves also unlike in some fast growing economies its new Prosperity has been shared in the nation the proportion of people in extreme poverty fell from above seventy percent in the early 1990s to around 10 percent in 2016. the World Bank credited the jobs created by Vietnam's export sector for this remarkable poverty reduction in a recent report perhaps most importantly the economic growth was fairly inclusive according to the world economic forum's inclusive development index Vietnam is part of a group of economies that have done particularly well at making their growth processes more inclusive and sustainable women too fared better their employment rate is within 10 percent of that of men notes the World Bank and women-led households are less likely than those by men to be poor although inequalities remain that's the kind of growth that's admirable oddly enough even as Vietnam is checkmating China by taking business from them data from the general department of custom shows that in 2022 China was Vietnam's largest trading partner with a total two-way trade turnover of 175.57 billion dollars this is a lot of trade being had there this was followed by the US who had 123.86 billion dollars the Republic of Korea who had 86.38 billion dollars in Japan who had 47.61 billion dollars all worth of trade trade between Vietnam and the U.S has been particularly good with Vietnam being one of the top 10 largest Goods trading partners of the United States the total two-way trade value of goods in 2020 with the U.S was 89.5 billion dollars Goods exports to Vietnam from the U.S totaled 9.9 billion dollars while Goods imports from Vietnam totaled 79.6 billion dollars this figure has 2:30:03 only risen with time as in 2021 Vietnam exported 99.3 billion dollars to the United States the main products exported from Vietnam to United States we're broadcasting equipment 17.4 billion dollars other Furniture 6.23 billion dollars in seats worth 4.53 billion dollars among other things don't find these objects surprising it's simply what the US mostly imports from Vietnam in fact in the past month the top three U.S imports from Vietnam also by value were cell phones related equipment computers and Furniture parts we had to mention that for those of you who might have been surprised that the US Imports furniture and seats in 2022 the total two-way trade value between the Nations was as we mentioned a second ago 123.86 billion dollars we emphasize this to show you just how much these trade figures keep going up as trade between the two Nations keeps improving year after year so yes we think it is quite safe to say that trading globalization has been an important tool that Vietnam has managed to use in its favor the second factor that Vietnam has going for it is that through its own domestic policies and extensive reforms the nation has managed to put in place business friendly regulations all while lowering the cost of doing business in the nation while trying to make foreign friendly policy the government's drive towards an open economy also included domestic reforms that targeted matters of governance from the inside in 1986 the country created its first law on foreign investment enabling foreign companies to enter Vietnam since then Law Firm Baker and Mackenzie said in a 2016 report the law has been revised a number of times mainly to adopt a more pro-investor approach while aiming to reduce administrative bureaucracy and better facilitate foreign investment into Vietnam this has worked seeing as that the foreign direct investment in Vietnam averaged 7.29 billion dollars from 1991 until 2023 reaching an all-time high of 27.72 billion dollars in December of 2022. these were astonishing figures and of course they did not go unnoticed in international rankings in the world economic forum's Global competitiveness report Vietnam Rose from 77th place in 2006 to 55th in 2017 and the world bank's ease of doing business rankings meanwhile Vietnam Rose from 104th Place in 2007 to 68th place in 2017. last year the bank said Vietnam made progress on everything from enforcing contracts increasing access to credit and electricity paying taxes and trading across borders that's why an achievement to make and that is all thanks to Vietnam's own domestic reforms finally the last factor that has contributed to the nation being where it is today is the fact that Vietnam has invested heavily in human and physical capital predominantly through public Investments the Asian nation has truly invested a lot in its human capital and infrastructure facing a rapidly growing population one that stands at just under 99 million today half of whom are under 35 and up from 60 million in 1986. Vietnam made large public investments in primary education this was necessary as a growing population also means a growing need for jobs in addition to this Vietnam also invested heavily in infrastructure ensuring cheap Mass access to the internet this might sound minor but with the fourth Industrial Revolution knocking on Southeast Asia's door having a sound I.T infrastructure in place is essential preparation at the end of the day looking at Vietnam one can see that those Investments have paid off armed with the necessary infrastructure and market-friendly policies in place Vietnam became a hub for foreign investment and Manufacturing in Southeast Asia Japanese and Korean electronics companies like Samsung LG Olympus Pioneer and countless European and American Apparel makers has set up shop in the country only serving to increase the nation's economic benefit in fact due to the infrastructure and labor investments in the nation Vietnam is the fourth largest textile exporter in the world that's quite the achievement for such a small nation the amount of their exports is estimated to be over 38 billion dollars specialization modernize and the manufacture of high quality products are their primary goals to compete in this competitive market and it definitely is working out for them the nation's textile industry is made up of the downstream sector fiber production and Upstream garment manufacturing growing garment exports to the United States Japan the European Union and South Korea are a significant component fueling the expansion of Vietnam's textile sector as it keeps growing it will be no surprise to see Vietnam directly rivaling China in the textiles industry in the years to come as the company is on what can only be described as an unbelievable growth spurt these free factors have collectively LED Vietnam's GDP growth to increase with it being at least five percent per year and just last year it peaked at a whopping eight percent this is in Stark comparison to China which Grew From just 2.99 its lowest since 1990. just looking at this graph of Vietnam's GDP growth shows a tale of nothing but progress and increase with such rapid economic growth over the years the country country has grown from one of the poorest countries in the world to a comfortably middle income one so all this said is there anything that can stop Vietnam from checkmating China despite all the High Praise that we carry for Vietnam the nation still faces severe hurdles to Future growth perhaps the most important and the most limiting factor to the nation's ability to properly Checkmate China is the country's population size quite frankly it will never amount to more than a fraction of China's you see Vietnam is slightly less populous than China's Southern Guangdong Province the birthplace of Chinese special economic zones in 1979 and still a key component in its manufacturing Foxconn even had its Flagship campus in Guangdong while Chinese Tech Giants Huawei and ZTE are headquartered there these companies are centralized they are mainly because the province's easy access to Hong Kong and Coastal ports and access to the Chinese labor pool Vietnam on the other hand has none of the benefits that come with being a province of a vast economically Diversified Nation with the world's largest Workforce that's is where they start to lag behind according to a Beijing National census conducted in 2010 around one-third of guangdong's population of 104 million were migrants from elsewhere in China while Vietnam's Royal population of around 65 percent certainly leaves room for urban migration to bolster Manufacturing the country lacks China's hundreds of millions of people ready to travel to fill positions as they arise the factories in the Pearl River delta churning out iPhones and Nike sneakers can rely on a steady stream of migrants from across China to man the assembly lines while Vietnam has only itself to turn to with a small population what this means is that as the growth intensifies Vietnam might not be able to keep up with demand based on the simple fact that it'll run out of Labor this puts a cap on the level of growth they can experience in addition to this in comparison to China Vietnam's Workforce is relatively low skilled and its energy Supply is having a hard time keeping up with demand and although the country has made significant advances in infrastructure development it still ranks 47th out of 160 countries in this regard that's yet another setback to Vietnam's plan to Checkmate China we know that some of you are asking yourself other than labor shortfalls can anything stop Vietnam's Ascent to the top of the Asian food chain well just like with most things yes and no with the appetite for globalization on the Wayne in many parts of the country tree Vietnam looks particularly vulnerable and with good reason Vietnam's exports are worth 99.2 percent of a GDP yes 99.2 percent just to further clarify that figure what we're saying is that Vietnam's whole economy is basically based on foreign investment in trade if anything at all were to hinder supply chain movements or if the foreign policy of its chop training partner shifted against it Vietnam will be stuck in some very hot and unpleasant soup this is a real possibility given how geopolitics in the political economic landscape are always shifting however for now Vietnam looks to profit from rather than be hurt by increasing Global Cherry tensions that constantly Rock our fragile World despite Vietnam making ground on China's economic territory the truth of the matter is China's Advanced supply chain and supplier Network driven by the government's long-term National policies make it a manufacturing giant at present no one country including Vietnam itself can fully replace China's manufacturing capacity let's take a moment to assume that in some way Vietnam could bridge this Gap and replace the dragon of the East even If This Were possible it most certainly would not happen overnight this is a process that will take time as businesses figure out which parts to relocate and how to navigate those Waters it will likely be messy to begin with but processes will get easier over time if they were to happen at all so you see it's a yes and no situation looking inward Vietnam's government has been pushing to move from being a low-tech manufacturer to high-tech manufacturing recent investments from Intel Samsung and UAC show that there is immense potential in the country and while it is safe to say that Vietnam can absorb all of China's manufacturing it is well positioned to take on more production along with other countries in the region and to play an important role in global value chains we believe the best way to tell the tale of this Asian country is in this one statement Vietnam is growing at its own pace in its own way whether it will truly Eclipse China or not is something that time will tell China is secretly buying important American technology companies and American banks are helping them we're sure most of you guys know that any and all companies in China are directly or indirectly controlled by CCP that's why Western governments are stricter when a Chinese company is buying a U.S firm especially when it affects National Security and sensitive data coming from U.S citizens so China has gotten creative to hide actions by funding American private Equity Funds and buying U.S companies through these funds this way there's no direct link to China but if you dig deeper you realize where the money is coming from so let's dig deeper into today's video first be sure to hit the like button as usual your likes help the video tremendously in the algorithm 2:40:04 the Chinese Investment corporation AKA cic which has been a passive observer in Western private Equity activities has taken on a more active role sparking heightened regulatory scrutiny to set the stage let's start with a bit of History not too long ago Western private Equity Fund managers proudly displayed their ties to cic China's Main Sovereign wealth fund it was a symbol of prestige and success in the world of Finance however times have changed and today we find the relationship between CIC and Western buyout groups a bit more complicated intense so what's changed well tensions between Beijing and the Western world have put a strain on this one strong relationship Western Regulators have become more cautious about direct Chinese Investments especially in sensitive technology sectors however in the realm of Chinese State funds within private Equity the attention has been somewhat limited this brings us to the recent Revelation that Goldman Sachs used a fund largely backed by cic to invest in sensitive UK and U.S companies this has raised some serious questions about the level of oversight and surveillance such deals deserve first let's take a closer look at cic the China Investment corporation was established in 2007 it was founded as a response to China's rapidly growing foreign exchange reserves which has surpassed one trillion dollars at the time the aim was to die diversify China's Holdings generate better returns and Foster the country's Global Financial presence it quickly became one of the most sought after private Equity backers major buyout fund managers worldwide counted cic among their limited partners so far cic has committed approximately 75 billion dollars to overseas private Equity Funds mostly managed by U.S firms the primary objective of cic is to achieve long-term risk-adjusted Financial Returns on its Investments this means it seeks to maximize returns while managing risks associated with its Investments additionally it is aimed to promote China's strategic interests globally which translates to ccp's strategic interests much like many other state-owned entities in China cic's actions have often been interpreted within the context of ccp's geopolitics its investments in foreign assets particularly in critical infrastructure and Technology sectors have raised concerns and host countries about National Security and economic influence CICS consider durable Financial Resources give it the power to substantially influence the financial markets of most Nations many have speculated that cic may strategically invest in foreign assets to influence markets or gain access to sensitive information now returning to the core issue at hand Goldman Sachs a Global Financial Powerhouse has employed a private Equity partnership fund financed with Chinese state capital to purchase a range of U.S and UK companies to grasp the importance of this issue let's start with the fundamentals in 2017 Goldman Sachs entered into a partnership with the Chinese Sovereign wealth fund China Investment corporation cic to establish a private Equity partnership fund worth a staggering 2.5 billion dollars the initial intention behind this fund was to Foster cooperation between the United States and China Goldman Sachs has employed the Goldman cic partnership fund to acquire seven companies spread across both the United States and the United Kingdom these companies operate in diverse sectors ranging from cyber security to artificial intelligence and drug testing thing what's intriguing about these Acquisitions is the lack of explicit mention of the fund's involvement leaving us to ponder issues of transparency and potential motivations these Acquisitions made by Goldman Sachs through the partnership fund carry implications that stretch far beyond the confines of Wall Street governments in the western world including the UK and the US have become increasingly Vigilant when it comes to foreign direct Investments especially those originating from China these deals underscore the role that private Equity Funds can play in allowing Sovereign wealth funds to indirectly invest in sectors that are considered vital to National Security one cannot help but wonder about the timing of these Acquisitions given the mounting tensions between Beijing and Western Nations however Goldman Sachs is not backed down but is instead ramped up the fund's activities making multiple Investments since 2021 this strategic move showcases the bank's commitment to nurturing economic ties with China despite the prevailing geopolitical climate despite many regulatory comments Goldman asserts that they are firmly in control and is stated that fund adheres to all relevant laws and regulations however Regulators must supervise the limited partnership agreement to ensure it aligns with their comfort levels regarding cic's intervention and access it's crucial to note that Goldman is not the sole player in this Arena other Financial firms including grazo and BNP paribus have struck similar deals recently the bank CEO David Solomon met with cic's Executive Vice President Ki bin and chair pen Chun this ongoing relationship underscores the significance of the Goldman cic partnership it's not just Goldman Sachs in 2017 Blackstone partnered with Chinese investment Corp cic according to Insider sources cic has tapped Blackstone to manage logicore's extensive portfolio of warehouses and Logistics properties despite all these Acquisitions and Deals it's not all rainbows and sunshine at cic over the past few months they've witnessed the departure of three top Executives from cic these resignations come at a time when Global markets are facing unprecedented volatility it's not just about these three over the last few years at least 17 Team Heads and managing directors have also left the fund but why is this happening it appears that several factors are at play here first there are diminishing investment opportunities the world is becoming more protectionist and deals are harder to come by the fund's leaders are finding it increasingly challenging to deploy their Capital effectively secondly there's the issue of compensation and competitiveness while cic did attract top talent from Wall Street and Beyond in its early days recent changes in compensation structures have left some Executives questioning whether their pay is truly competitive thirdly there are rising restrictions cic was initially set up to operate as a market-based investor but in recent years it has faced more constraints particularly as the Chinese government has Diversified its own Investments this shift has raised concerns about cic's ability to generate Returns on par with its earlier successes it's fascinating to see how the relationship between Goldman Sachs the cic the Chinese Elite and Western Government has evolved once they were wooing each other the U.S China tensions have certainly changed the Dynamics news like these often go unnoticed in the mainstream media that's why we started our geopolitical newsletter Global recap thousands of our readers have already subscribed to receive daily geopolitical updates directly in their email inbox no spam just concise news to sign up scan the QR 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