We focus on the birth of an economic giant as 15 Asian countries including China, South Korea and Japan have signed a trade agreement. Does this change the main global equilibria?
Say dragons hunt in herds and that confirms the incredible reboot of this area. China will close 2020 with positive growth, which will make it an exception among the main countries in the world. Japan has just come out of recession.
This trade deal is heavy. 1/3 of humanity and 1/3 of the wealth produced in the world (GDP) is colossal! You have all heavy vehicles in the region : China, Japan, South Korea (I already told you) but also Australia and New Zealand.
First, customs duties are reduced between these partners. But above all, we feel that the axis of the world is tilting towards the East. Work has already started in the East … Chinese production was almost back to normal in March.
Plans to support the economy in Europe (thanks to partial unemployment) have maintained the production of goods. Chinese coffee shop waiters out of work due to the pandemic have gone to strengthen the teams of e-commerce giant Alibaba. Japanese exports have also recovered. In other words : the world’s factory that supplies us with microprocessors, electronics or clothing has reopened.
China the leader
In addition, there is a considerable absence in this agreement: India, which did not want to be under Chinese rule. The other missing Pacific power is the United States. And that is going to be one of the first issues of the Biden presidency because this agreement is an airbag against the blows of Trump’s policy for 4 years.
The US administration has isolated China, overburdened with Asian products. Barack Obama had launched a draft trade agreement with the Asian countries from which Donald Trump departed on behalf of America First. Therefore, China has put several years to unite the Asian countries around it.
A blow to play for Europe
We can clearly see that we are at a turning point in economic history. Europe dominated the industrial revolution of the 19th century. The United States has dominated the 20th century, and Asia is taking power during the 21st century. But for now, China has no interest in being in front of the United States. You need a tripod and a strong Europe.
The whole question is knowing whether Europe will line up behind the United States now that the White House is about to be occupied by someone else haunted or if it will seek to exist on its own.
The crisis that we have just experienced, the arrival of digital technologies (artificial intelligence, 5G, tracking) dominated by China and Japan have shown that we can quickly get out of the epidemic if we accept to lose a little in individual freedom. Perhaps Europe will be tempted by a more interventionist political model Asian or defending a Western democratic model even if it means starting again more slowly than the others and stagnating economically?
The plus: the price of gasoline rises due to the vaccine
And yes … Diesel, the best-selling fuel in the country it increased by 1.53 cents from the prior week. The prospect of a vaccine pushes financial markets higher and suggests a recovery in the economy over time. However, the economy continues to run on hydrocarbons (gasoline, kerosene, fuel oil, gas) … And that, therefore, benefits the oil barrel.
The brand: 18/20 in the agency “Sixième Son”
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