China posts surprise trade deficit for March …China swung to a trade deficit of $880 million in March, the General Administration of Customs reported Wednesday, as imports surged 14.1% from a year earlier. The deficit, which followed February's $15.2 billion surplus, missed a forecast for a surplus of $14.7 billion from a Dow Jones Newswires survey and a $15.2 billion projected surplus tipped by Bloomberg News. − MarketWatch
Dominant Social Theme: China has conquered its minor economic problems and is re-emerging as the world's marketplace powerhouse.
Free-Market Analysis: We are not surprised that China imported more than it exported in March. The idea that has gained in currency in China is that since the West can no longer be an engine of consumerism, China will have to turn its own citizens into consumers.
We were always doubtful that this idea was a sensible one. Less than 70 years ago, Chinese society was imprisoning its intellectuals and sending previously wealthy individuals to spread night-soil in fallow fields to fertilize them. Any hint of erudition or intellectual aspiration was looked upon with suspicion and could end badly – in prison or even execution.
People had to look the same, dress the same and pursue a policy of maximum self-reliance. The decadent inventions and ideas of the West were basically criminalized as China's leaders sought to maximize the puritanical perspectives of Maoist Communism.
Now the children of this brutalized generation are being instructed to mimic the worst excesses of Western consumerist society. Ephemeral fashions, expensive cars and conspicuous consumption in all forms is to be order of the day going forward, as Chinese leaders encourage their citizens to pick up where the consumer society of the US in particular left off.
Again, we don't think such wrenching cultural shifts are especially feasible. The Chinese at this point must have an abiding distrust of their governmental leaders and are not apt to go deeply into debt to buy frivolous items just to keep their fellow Chinese employed.
In fact, we are told the great factories continue to fall silent while empty cities and skyscrapers stand as mute testament to a society that has overreached and now must deal with the consequences.
There ARE other strategies being applied, from what we can tell, the biggest one being what we all for lack of a better word, the African Gambit.
The African Gambit involves a big Chinese presence in Africa as a way to turn that country into another US when it comes to consumerism. Both China and the US are at it together and the result may be a startling transformation of Africa over the next decade.
China will exploit Africa's raw materials, pay for them and Africans in return will be encouraged to spend their newfound loot on Chinese products.
The US plan is similar, though reversed. The US doesn't want commodities from Africa so much as it wants cash. Use unexploited Africa as a bond-buying bastion in much the same manner as China and Japan were used. Then unleash the US consumer to buy African goods and services.
OK … the point is that anyway you look at it the game is changing. The locus appears to be not South America or Europe but Africa itself – the Dark Continent which is on the way to being opened up with almost hysterical energy.
The globalists, with their international economy collapsing around their ears, are eager to generate a New Frontier as quickly as possible. Africa offers the least resistance and the largest bang for the proverbial buck. We may be wrong in this analysis – time will tell. But we think we recognize a meme when we see one.
Africa continues to be pumped higher and higher. It may be an entirely artificial promotion, but it will convince many people – enough perhaps to make it work.