Gordon Chang on China's Economic Weakness and Iran's Port Deals

China's Influence in Iran

• 🤝 China's influence in Iran is described as deep, stemming from a $400 billion strategic partnership deal finalized in 2021.
• 🛢️ China reportedly acquires more than 90% of Iran's crude oil exports at discounted prices.
• 🇮🇷 There is an expectation that a new government in Iran would reassess and rebalance relationships with China, as they believe China has taken advantage of the country.

Doubts on China's Economic Data

• 📉 Goldman Sachs' forecast of 4.8% GDP growth for China is viewed with skepticism, with suggestions it's designed to please the Chinese regime.
• 📊 Underlying indicators such as tax receipts, housing starts, foreign investment, and corporate profits suggest the Chinese economy is declining and in a deflationary spiral.
• 🏦 The massive debt spree undertaken by China in 2008 to avoid a downturn has created ongoing problems, and current growth numbers are insufficient to retire China's debt.

Export Margins and Global South Resistance

• 🌍 While China's exports are reportedly surging, particularly to the global South, the margins on these exports are much thinner compared to those to markets like the United States.
• 📉 There are signs that even the global South is beginning to resist China's exports, indicating that export growth may not justify optimistic forecasts.
• ⚠️ A friend's observation of 20% unemployment in China is presented as a stark indicator of the economy's true state, contrasting sharply with official or optimistic forecasts.

Investment and Trust in Chinese Companies

• 🚫 Investing in Chinese companies traded on U.S. exchanges has seen fading enthusiasm due to distrust in their accounting practices and business dynamics.
• ❓ Questions are raised about how financial institutions like Goldman Sachs can produce optimistic forecasts when anecdotal evidence points to significant economic hardship, such as high unemployment, within China.