Today the top trends forecaster in the world said China’s rising power is not only threatening the US dollar but also the IMF and World Bank.

April 5 (King World News) – Gerald Celente:  Here is a look at trends analysis and trend forecast for China:

● China’s Consumer Spending Remained Robust in March

● Is China the World’s New Bailout Lender-in-Chief?

● Europe Should Reject Demand to Stop China Trade, Beijing Says

China’s official purchasing managers index (PMI) for non-manufacturing industries, including construction and services, rose from 56.3 in February to 58.2 in March, its highest since May 2011, The Wall Street Journal reported.

Readings above 50 indicate expansion. The higher the reading, the more robust the level of business activity.

In contrast, manufacturing’s PMI slipped slightly, from 52.6 in February to 51.9 in March, signaling that factory orders for export remain weak under the global economic slowdown.

However, factories’ PMI remained above the WSJ’s estimate of 51.9.

The figures show that China’s consumers are emerging from three years of COVID restrictions with cautious but sustained enthusiasm.

Chinese consumers, like their Western counterparts, have built their savings during the COVID War…

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March home sales by China’s 100 largest developers increased by 29 percent, year over year, with sales in March 42 percent higher than February’s, the China Real Estate Information Corp. said.

The positive figures bode well for global economic growth this year, The Wall Street Journal noted, as much of that expansion will depend on China while Western nations struggle with ongoing inflation, higher interest rates, and slowing consumer spending.

“There is no doubting the strength of the rebound in the economy,” Aaditya Mattoo, the World Bank’s chief East Asia economist, said in comments quoted by the WSJ.

The bank has bumped its outlook for China’s GDP growth this year to 5.1 percent, from 4.6 it predicted last October. 

However, China’s jobs market remains weak, slowing growth in wages. 

Also, analysts are skeptical that consumer spending can replace the frenzied real estate market of recent years as well as the loss of export manufacturing in the face of weak global demand.

The second and third quarters will test the rebound’s durability, Ting Lu, Nomura’s chief China economist, wrote in a recent note. A worsening global outlook could mean “this won’t last long,” he said. 

Orders to China’s factories from foreign purchasers will remain below the average set in recent years. The world is flirting with recession, which will cut factory orders even more.

Because much of China’s economy is tied to export manufacturing, the loss of those overseas orders will limit the degree to which the country’s business activity will grow back toward pre-COVID volumes.

China will probably see its economy grow more this year than any other major country. However, that growth will remain below historical norms…

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Since 2000, China has become the world’s largest lender nation, doling out at least $240 billion to help 22 emerging nations struggling with massive debt, according to a study this month from an international group of economists led by the World Bank.

As of 1 March, more than 35 poor nations were in debt distress—a condition requiring loans to be restructured to avoid default—or very close to it, the International Monetary Fund (IMF) reported. 

Using its swap lines, China has poured at least $170 billion into rescue loans to Bangladesh, Pakistan, Nigeria, and other poor nations in arrears or facing default on foreign debt, and another $70 billion to help countries that have run short of cash, the study said.

The swap lines are low-interest loans from China’s central bank to its counterparts in other countries. 

Since 2000, the People’s Bank of China has finalized about $580 billion worth of swap agreements with 40 countries and trading blocs, in part to promote its renminbi currency as a replacement for the dollar as a currency of choice for foreign reserves and international trade.

However, the struggling nations are not using the swap loans just for the uses China intended.

The countries also are using the money to increase foreign reserves to protect credit ratings as well as to strengthen the value of their own currencies. Some countries are using China’s money to help fund their general budgets.

This has turned China’s central bank into a source of bridge loans, which has always been the purpose of the International Monetary Fund (IMF), Bloomberg noted. 

“In many cases, the PBOC swaps provide rapid, high liquidity volumes to central banks that otherwise would not typically have access to emergency liquidity and fill a critical gap in the global financial safety net,” William Kring, executive director of Boston University’s Global Development Policy Center, said to Bloomberg.

Intentionally or not, China has turned its swap lines into “a new global system for cross-border rescue lending to countries in debt distress” that mirrors the function of the IMF, World Bank, and other international rescue lenders created by Western nations, the study said…

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Critics have blamed China for causing many poor nations’ debt woes in the first place.

China’s $900-billion “Belt and Road” initiative made cheap loans to many of those countries to build roads, airports, schools, medical facilities, and other infrastructure, usually as a tool to cultivate trade deals that would bring natural resources to China’s factories.

Much of the troubled foreign debt is owed to China for those loans made during more optimistic times.

Speaking in a 27 March online forum, Jin Zhongxia, chief of the People’s Bank of China’s international office, blamed emerging nations’ debt mess on the U.S. Federal Reserve and other Western banks that have hiked interest rates steeply over the past year.

Traditionally, China has refused to participate in collective negotiations to restructure debts owed to it. Also, rather than forgive debt as Western nations sometimes do, China prefers to give countries more time to pay what they owe.

In fact, the study found that the countries drawing the most from China’s swap lines were also those deepest in debt to China—raising the conjecture that China is bailing out its own failing Belt and Road loans.

“What’s clear is that China is rapidly playing a greater role in the calculations crisis-afflicted countries must make and offering an alternative to a system that’s guided the world’s response to economic emergencies for decades,” Bloomberg said. 

“That matters as the two largest economies increasingly battle for influence in a global financial and monetary system” that, as the study’s authors write, is ‘becoming more multipolar, less institutionalized, and less transparent’.” 

The deeper economic conditions fall and the lower the value of the dollar goes down, the United States, the World Bank and the International Monetary Fund will lose more business to China as Asian, African and South American nations pull away from U.S./NATO geopolitical and economic hegemony…

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European nations should not accede to U.S. demands that they curtail trade with China, and any country does so “at its own peril,” Fu Kong, Beijing’s ambassador to the European Union, said in a Financial Times interview.

The U.S. will “stop at nothing” to disrupt trade between the two entities, Fu added, noting that Europe was showing a “protectionist tendency.”

“Who in their right mind would abandon as big a thriving market as China?” he wondered.

The Netherlands had succumbed to U.S. pressures by curtailing exports of sophisticated chip-making technologies to China, Fu charged. He hinted at unspecified retaliation.

The Netherlands “need to be mindful of the fact that China cannot just sit there and see its own interests being trampled without taking any actions in response,” he said.

“We do hope European governments and politicians can see where their interests lie” and ignore “unwarranted” pressure from Washington, he added.

Fu’s warnings came as European Commission president Ursula von der Leyen called for tighter scrutiny of trade and investment with China in strategic technologies such as artificial intelligence and quantum computing.

“A strong European-China policy relies on strong coordination” with the U.S. and “a willingness to avoid the divide-and-conquer tactics we know we may face,” she said in a recent speech. 

The goal is not to “decouple” from China but to “de-risk” the relationship, she added.

Europe is mistaken if it allows its relations with China to be shaped by Russia’s war in Ukraine and China’s tacit support for it, Fu said, asserting that Russia’s “legitimate security interests” must be honored.

It’s all about the bottom line, and the bottom line is that Europe, with a total population of 743 million people needs to do business with China, a country of 1.4 billion. As Gerald Celente has forecast, the 20th century was the American century but the 21st will be the Chinese century because the business of China is business and the business of America has been, and is, War.

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***To listen to Gerald Celente discuss the death of the dollar and gold skyrocketing CLICK HERE OR ON THE IMAGE BELOW.

***To listen to Alasdair Macleod discuss the silver squeeze and the lack of available physical silver supplies CLICK HERE OR ON THE IMAGE BELOW.

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