GOOD MORNING FROM LONDON
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#1 CHINA’S HOLDING OF U.S. TREASURIES FALLS.
THE FINANCIAL TIMES
#2 CHINA’S NEW WORLD SNOOKER CHAMPION.
SOUTH CHINA MORNING POST
#3 CHINA KEEPS ITS NERVE AS TRUMP PANICS.
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#1 CHINA’S HOLDING OF U.S.TREASURIES FALLS
THE FINANCIAL TIMES
“China’s recorded holdings of Treasuries have fallen below those of the UK for the first time since the start of the century, underlining an ongoing shift in Beijing’s management of its foreign reserves.
The value of Treasuries held by Chinese investors, as recorded by US banks and custodians, fell to $765bn at the end of March, down from $784bn in the previous month. Those held by UK investors rose almost $30bn to $779bn, according to data published late on Friday. The crossover makes UK investors the second-largest foreign holders of US Treasuries after Japan. It is the first time UK holdings have been higher than China’s since October 2000 and is the latest sign that Beijing is seeking to diversify gradually away from US assets.
“China has been selling slowly but steadily; this is a warning to the US” said Alicia García-Herrero, chief economist for Asia-Pacific at Natixis. “The warning has been there for years, it’s not sudden — the US should have acted on this well before. Beijing has been gradually reducing its official holdings of US treasuries from a peak of more than $1.3tn in 2011, diversifying into other assets including US agency bonds and gold.
GRAHAM PERRY COMMENTS;-
China’s big holdings of US Treasuries reflects the long term trade surplus created by the surge in U.S. purchases from China that President Trump is keen to curtail. But China’s sale of U.S. Treasuries comes at a cost to the U.S. because it pushes yields up and makes debt refinancing more expensive.
China’s Treasury holdings hit its highest level since 2009. “Based on the visible data, there is no doubt that China has shortened the maturity of its US portfolio”, said Brad Setser, a senior fellow at the Council on Foreign Relations and former US Treasury official. China has been unloading itself of U.S. Treasuries for some years and, correspondingly, it has been planning for Trump’s Tariff challenge for years.
China could not say when it would happen but it was sure it would happen. Why? Because the Chinese side knew that the U.S. would move against China. It is not about Economics. It is about Politics. It was always on the cards. This confidence about U.S. moves against China come from a reading of history. China studies the past in the context of the present all the time and at all levels of Government and Party. Anticipating the Future prepares you for the Future. Understand the movement of tectonic plates and you will make more right decisions than wrong decisions.
In part this is Marxist Determinism which is at the heart of China’s development. The Chinese understand better than their rivals the ebb and flow of the struggle between U.S. Capitalism and China’s Socialism. They are alert to the dynamics of development more so than Washington or London or Brussels, Paris or Berlin. But China is strongly guided not only by the works of Marx, and Mao Tsetung but also by the writings of China’s famous strategist from history Sun Zhu who lived in 500BC.
China has a strong sense of history, a strong sense of the rise and fall of powers and civilisations. 2049 is a big focus today in China but it is already looking beyond the first 100 years of the new People’s Republic of China. Turning China from the “moderately prosperous society” it is today to the “prosperous society” it will become in the years after 2049 fuels its growth, its determination and the mindset of its 1.4 bn people.
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#2 ZHAO XINTONG – NEW SNOOKER WORLD CHAMPION
SOUTH CHINA MORNING POST
“An ability to excel at snooker was once seen as the sign of a misspent youth. Not any more. Newly crowned king of cue sports, Zhao Xintong, collected a £500,000 (HK$5.19 million) prize after becoming China’s first world champion this month. He is now a national hero.
The 28-year-old was mobbed by fans on his return to Shenzhen and spoke of his new, superstar status when visiting Hong Kong last week.
His story, which includes involvement in a match-fixing scandal, is one of rise and fall and rise again. It should be both a lesson and an inspiration for young players.
But the significance of his victory in England, watched by 150 million fans in China, goes beyond Zhao’s redemption and triumph. It has been described as the most important in the sport’s history.
GRAHAM PERRY COMMENTS;-
Zhao Jintong’s World Champion Snooker win is a breakthrough for China and highlights the potential for Chinese players to dominate snooker in the future.
Zhao, known as “The Cyclone” because of his fast, attacking style, beat veteran Welsh star Mark Williams 18-12 in the final at the Crucible Theatre in Sheffield where he lives. He was given a standing ovation.
The popularity of snooker soared in the UK in the 1970s and 1980s, with the arrival of colour television. Today, snooker hopes to follow the global expansion enjoyed by other sports. That is why China is so important.
China now has more than 300,000 snooker halls. Ten of the 32 players in the main draw for the world championships were from China. But China has experienced Rise and Fall in its recent snooker past. Zhao won the UK Championship in 2021 and seemed set for imminent stardom. Instead, he became caught up in the sport’s biggest match-fixing scandal. He was suspended for 20 months.
This was a national disgrace. Nine other Chinese players were found guilty of involvement. Zhao was the least culpable and admitted his guilt, describing his conduct as foolish. He did not throw matches but was a party to another player’s match fixing and placed bets himself. Zhao fell from grace. He damaged himself and he damaged China. And China Snooker was at a low ebb. Rise, Fall but Rise Again?
There was a way back. With his suspension served Zhao had to play on the amateur circuit and then qualify for the world championships. He had to do it the hard way. But he only had himself to blame.
Zhao is fortunate. The consensus within the sport is that he is now both redeemed and rehabilitated. He deserved a second chance – and has taken it.
If his win marks the beginning of a new brighter era for the sport, with China playing a leading role as there is talk of the world championships moving away from the Crucible Theatre in the UK, which has only 980 seats, then more will be heard of Zhao.
Hong Kong would be a strong contender, holding the record for attendance at a snooker tournament, set at almost 9,000 in 2022. The City has some young talent with potential and has changed the law to allow children as young as eight to enter snooker halls – the age that Zhao was when he began to play Snooker.
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#3 CHINA KEEPS ITS NERVE AS TRUMP AIMS TO CREATE PAIN FOR CHINA
GRAHAM PERRY COMMENTS;-
Trump is confident, assertive, and cocky. He is larger-than-life. He is a personality of extreme self-projection. He is also a psychological mess as his niece Professor Anne Trump, a psychologist of repute, has written and lectured. Leave aside what Trump is and consider what Trump does. His goal is to de-stabilise, to create chaos, to defy his opponents, to be assertive and bludgeon his way through the chaos he creates. Trump is a unique politician, and that is said without any sense of approval.
He is also dangerous, disruptive and determined to do damage. He never plays safe. He prefers challenge and chaos to calm and consistency. He wants to rock the world and stir the tempests. He loves to destabilise.
Most nations buckle. They are nervous and apprehensive, They tend to cave in rather than to stand strong. This brings us to the significant under-estimation by Trump of the Chinese reaction to the U.S. 145% Tariff figure. Trump had calculated that China would come running. He was wrong – China went quiet. The phone did not ring. China’s leadership kept its own counsel. The reaction rattled Trump. He blinked first.
This is a surprise to many but Trump and the State Department and the Pentagon had not done their homework. They had failed to study China’s actions in the War Against Japan and the Civil War against the KMT. They had also overlooked the significance of the writings of Mao Tsetung – many of which were penned during years of conflict. If they had done their prep they would have anticipated that China would not react. China correctly calculated that Trump had over-played his hand and would take the initiative and contact Beijing.
One relevant point – I first visited China in 1965. Tourists were few but amongst the few none were from the U.S. Why?
Because the U.S. Government had banned any U.S. citizens from visiting China. The ban was lifted in 1972 and, even then, it was a trickle of visitors and not a flood. The U.S. shot itself in the foot. A whole generation of U.S. citizens failed to visit China and failed to access the culture, the mindset and the politics of the largest nation in the world. Where China is concerned, the U.S. has always been under-prepared because it has been under-informed
GRAHAM PERRY
