Many brothers don't understand, what is the essence of China-U.S. trade?
China exports deflation to the U.S., while the U.S. exports inflation to China. For the past thirty years, China has produced more and more industrial goods, but lacks sufficient purchasing power, continuously accumulating deflation risks.
The U.S. has printed more and more money, but lacks enough corresponding goods, continuously accumulating inflation risks.
But this allowed the two sides to mutually export inflation and deflation through bilateral trade, Both maintained a mildly inflationary and healthy environment over the past two to three decades.
Then, the trade war came. China lost the U.S., the world's largest consumer market, and could not digest its own production capacity. The U.S. lost China, the world's largest industrial capacity, and could not digest its own currency. Thus, everyone saw a verbal fight across the Pacific, with high blood sugar and low blood pressure.
On one side, they desperately raise interest rates to control their own inflation. On the other side, they desperately lower interest rates to avoid falling into deflation.
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