Why is China the world's largest economy? Why did Putin say "America is finished"? These two conclusions came from a two-hour interview with an American reporter. This informative interview reveals Russia's Putin's judgment on China and the United States and their related policies.
I decided to interpret the two-hour interview, and some of the topics we were most concerned about were: How does Russia view the U.S.-China relationship? What is China's economic strength? Why has the U.S. been in recession? Is the hegemony of the dollar falling?
This two-hour conversation was an exclusive interview between Russian Putin and American journalist Karls. Putin explained the legal rationality and inevitability of the Russia-Ukraine conflict very clearly, and he said that the direct root cause of the Russia-Ukraine conflict comes from the all-round support of the United States for Eastern European countries, which is the so-called "NATO eastward expansion".
Next, American journalists asked an interesting question about the hegemony of the dollar. Carlson asks: will the hegemony of the dollar, as the world's reserve currency, disappear?
Putin believes that the use of the dollar as a tool of foreign policy struggle by the United States is the biggest strategic mistake made by the American leadership. He acknowledged that dollar hegemony is the cornerstone of American power and said that no matter how many dollars are printed, it will quickly spread around the world, resulting in extremely low inflation in the United States.
I'll give you an example here, think of the subprime mortgage crisis of 2008, when the U.S. financial system completely collapsed. If this happens in Europe, you know, if it is such a big financial crisis, it will not be a matter of a year or two, or even longer, for Europe to recover.
But look at the United States, relying on the hegemony of the dollar, they played the game of printing money and issuing US bonds, and soon pulled Europe and China in, so that the other two major economies also shared the crisis of the United States. Think of the 2008 gang of ** traders, they might understand it now.
Now it's 2020 again, and the Fed's flood rhythm is actually relying on similar means, using the hegemony of the dollar to pass on the economic crisis in the United States. But you know what, this time the price is global inflation, and in Europe, the inflation problem has not been solved.
Therefore, Putin came to a conclusion: the hegemony of the dollar is like a major ** for the United States, which is used to safeguard its global interests. However, you also have to pay attention to the fact that although the hegemony of the dollar is easy to use, every time you use it, the power will weaken a little, as if it has been "counterattacked".
Now look at it, America's allies are cutting dollar reserves, and the whole world is trying to find a way to adjust the structure of foreign exchange reserves, no longer only buying ** and US bonds as before. Because everyone knows that if they only hold US dollars, once they fall out with the United States, they can easily take measures such as restricting transactions and freezing assets.
So we see that China has been constantly selling US bonds, and previously held up to 1$3 trillion, now less than $800 billion. This is not because China is short of money, but because we perceive that the dollar is really not reliable enough as a reserve currency.
In recent years, China has continued to ** U.S. Treasury bonds. Putin also stressed that many oil-producing countries are now considering using the yuan to pay for oil orders, and the United States seems to be completely unaware of this and still maintains a high-pressure posture towards the Middle East. Putin sees this as "self-defeating".
In order to counter the sanctions of the hegemony of the dollar, Russia has adopted a strategy of changing the currency of the transaction. Previously, the dollar accounted for more than 50% of Russia's foreign exports**, but now it has fallen to 13%. And the rest of the scale is paid in yuan, and even the scale of the use of yuan is larger than the Russian ruble.
Russia has personally experienced the blockade of dollar hegemony, so Putin is the one who has the most say. In Putin's view, the hegemony of the dollar is indeed strong, but with each use, its authority falls. At present, all countries in the world, especially China and Russia, are on high alert.
Dollar hegemony, use once, recession once.
In a follow-up interview, the American journalist tried to sow discord between China and Russia, asking whether China could completely "dominate" the BRICS. For his part, Putin shared his views on China.
The BRICS group has now surpassed the G7 group as a share of GDP, so it is clear that times are constantly changing.
In addition, China's economy has become the world's largest economy in terms of purchasing power parity. In second place is the United States, followed by 1Japan, with a population of 500 million, and Russia ranks fifth in the world.
Many will ask why Putin sees China as the world's largest economy, largely because of a standard issue between GDP and purchasing power parity.
At present, one standard for measuring the GDP of China and the United States is based on the US dollar exchange rate, which is also an internationally accepted exchange rate standard. According to this statistical method, China's GDP ranks second in the world after the United States.
However, with the advent of deglobalization, some countries, such as Russia, are unable to use the dollar normally, so they prefer to use a calculation called "purchasing power parity" to measure a country's GDP. This method actually counts the amount of money you have to pay to buy a certain number of goods within different countries.
In terms of purchasing power parity, China is already far ahead of the curve and has become the world's No. 1.
According to data released by the World Bank in 2022, 3The purchasing power of 99 yuan is already equivalent to 1 dollar. And the current exchange rate is 72 RMB to 1 USD.
Therefore, although the nominal exchange rate is 72, but if after de-globalization, in China, we can buy goods worth 1 US dollar for only 4 yuan.
Putin believes that China is now the largest economy in the world, and according to more scientific parity purchasing power calculations, China is the real first, while Russia is still the largest economy in Europe. Traditional methods of GDP statistics are no longer well adapted to the complex international community. As a result, more and more countries are no longer paying attention to exchange rate GDP in US dollars, and are more inclined to use "purchasing power parity" to calculate. This trend is partly the result of economic sanctions and political coercion imposed by the United States on other countries.
Putin also has his own views on Sino-Russian relations. First, he believes that China has been Russia's neighbor for hundreds of years, and Russia cannot choose its neighbor; Secondly, Putin believes that China's foreign policy is not aggressive, but seeks compromise. As a result, Americans think that the United States will be frightened by the close relationship and economic ties between China and the United States, but in reality, China and Europe are much closer, and Europe's fear of China is far less pronounced than that of the United States. Therefore, the U.S. suppression and sanctions against China are more out of strategic interests.
In terms of economy, the mutual amount of China and Russia is expected to be 200 billion US dollars, but in fact it has reached 240 billion US dollars by 2023, which shows that China and Russia have seen great growth. The border crossings between China and Russia have also become busy.
More importantly, China and Russia are very balanced and complementary, especially in the fields of high technology, energy and scientific research. Although the United States has been frantically sanctioning China and Russia, with BRICS countries like China and Russia, they have become an international organization that cannot be ignored in the world.
Therefore, China, Russia and the BRICS are actually the inevitable development of the times. Just as the sun rises in the east every day, we cannot stop it, and the world can only adapt to the presence of China and Russia.
Overall, the 2-hour interview was extremely informative, and it is difficult to cover it comprehensively in one article. But there are some important clues that can be glimpsed from it.
For example, in terms of dollar hegemony, Putin made it clear that the United States uses the dollar as a tool to sanction other countries, although it has an effect, but the backlash is more serious, resulting in a continuous decline and decline in the international influence and control ability of the United States. Now, countries, including China and Russia, have been constantly raising US debt to prevent the impact of an overly strong dollar.
In Putin's view, the dollar exchange rate is no longer important, and parity purchasing power is the standard for measuring a country's economic aggregate. By this standard, China has surpassed the United States. Just like the same fifth-generation fighter, the American F22 costs 1500 million dollars, and the better J-20 only costs 1$100 million, $40 million cheaper.
Therefore, the actual cost of the same item may be different, which is one of the important reasons why Putin believes that China's economy has surpassed that of the United States.
Finally, I would like to say that the current Sino-US relations are indeed tense, and we are being sanctioned and blocked by the United States in areas such as chips. However, in terms of both development potential and economic aggregate, China will not lose to the United States, and it can even be said that it is on a par with the United States.
The Chinese people should be more confident! It is foreseeable that the friction and confrontation between China and the United States will continue for quite some time. We will not rest on our laurels, and we also hope that the confidence shown by Putin in the interview will give us more confidence in the future of the Chinese people. China, come on!