Recently, global steel prices have soared three-fold, and Taiwan’s steel stock prices have almost doubled at least simultaneously. This is a phenomenon that has never occurred in the past two decades. What is the reason behind it?
The apparent reason is that Australia has substantially increased the price of iron ore, but the main reason is that China has drastically cut production capacity and eliminated subsidies to curb production capacity and no longer encourage exports.
Since China is the world’s largest steel producer, its production capacity accounts for 55% of the world’s total. Therefore, when China cuts production and curbs exports, and India, the second largest steel producer, falls into the epidemic situation, it is conceivable that the demand for steel is in short supply. How serious the situation is, so prices soared.
Why should China reduce production capacity and curb exports when demand in the global steel market is tight? Why not take the opportunity to expand production and make a good profit?
Retaliation from China?
The answer is that China used to cut steel production capacity and curb exports to create inflation and hit the economic recovery plans of the United States and the Western world.
In the past, China provided abundant global market demand and low-priced steel products, which played a decisive role in helping the world suppress prices and avoid triggering global inflation. Even if the United States has repeatedly implemented the so-called quantitative easing (QE) policy and printed a large number of banknotes, it can still enjoy low-interest funds without causing the depreciation of the dollar and inflation. In fact, these are all factories in the world, China, sacrificing environmental protection, bearing cheap labor, and contributing to global economic development.
But this time China is obviously no longer willing to take advantage of it anymore, curb steel supply and allow global inflation to let European and American countries experience the soaring prices without China’s sacrifices!
When the price of steel, a pillar product in economic development, and all raw materials have skyrocketed, look at Biden’s trillion-dollar infrastructure. Will it continue? See if the Fed can maintain the original low interest rate policy?
When inflation causes interest rates to rise, the European and American stock markets and bond markets will inevitably collapse, and the international economic order will be in chaos. At this time, the new eight-nation coalition forces that the United States attempts to unite again will collapse like scattered sand and will no longer be able to fight against the containment of China!
China has begun to set rules for the United States! The “List of Unreliable Entities” promulgated by the Ministry of Commerce today is the Chinese version of Section 301. Use the market to block the counter-technology blockade. This original list of deaths shocked the global technology market and capital! This is the first country in the world to set rules for the United States after World War II. If you just look at this list as China’s counterattack against the current bullying of the United States, you would underestimate the lethality of this list.
The significance of the list is not only to address the current U.S. government’s head-on response to China’s unreasonable and unreasonable actions by U.S. companies, but also to formulate rules for the great shift between China and the United States five or ten years later. Set rules for American chip and software companies: cut off supply and network to Chinese companies at will, and please get out of the Chinese market. Set rules for arms sales companies to Taiwan: threaten China’s national security, or may pose a threat, please get out of the Chinese market.
Not only American companies, but Japanese and European companies, also set the rules for you! Set rules for U.S. government officials, politicians, congressmen, media people, and various think tanks: China’s security, dignity, and inviolability! This is the 38 degrees north latitude during the Korean War, and this is the 16 degrees north latitude during the Vietnam War. If you cross the line, you will be beaten! This is the sword of Damocles in the East!
The whole world understands the voice of China. American, European and Japanese companies understand the voice of China. The capital of Wall Street understands the voice of China. The dollar plummeted. U.S. stocks fell in a row. U.S. debt fell overcast. In a capitalist society, dialogue is done in a language that capital understands. In a socialist society, we use the unity of the whole society to show our strength. This sword will hang there forever for five, ten, thirty years!
This sword is called China’s right to speak! ! ! All friends who have a patriotic heart, or overseas Chinese and foreign friends, please move your finger to forward it to your circle of friends or WeChat group. The more you forward, the better, to show that you have a Chinese heart.