Five questions from Wang Yi

Mr Wang Yi, seasoned foreign minister and top diplomat of China is precisely the Chinese version of Sergei Lavrov of Russia whose pithy comments and persuasive arguments are noteworthy.  In a meeting held on March 7, 2025 on the side-lines of the Chinese Communist Party conference, Wang Yi asked five questions from USA. All are on geoeconmics.

Addressing the gathering of Communist Party delegates from across the country and foreign representatives and journalists he put forward the following five questions for which America has to reply. Here are the five bombshells:

1. Has US trade deficit widened or narrowed?

2. Has US manufacturing become more competitive or less?

3. Has US inflation gone down or up?

4. Has the American life got better or worse?

5. Finally, are the gains USA getting from the Tariff War justified?

 

Here are the replies America has to tell but would not say loudly:

1. The US trade deficit in goods and services reached a record high in 2024 amounting to US$ 131.4 Billion compared to US$ 98.1 Billion in 2023, due mainly to the surge of Chinese imports. America imported Chinese goods to the tune of US$c438.9 Billion last year.

 2. The shift towards service industry and financialization has eroded manufacturing competitiveness across the board with the exception in high-tech

3. Today the US inflation hovers around 3% compared to 0.7% a decade ago

4. The Social Progress Index (SPI) computes thus: The United States ranked 28th in social progress in 2024, compared to 16 in 2014. Incidentally, decline is manifest in quality of life, personal safety, health and environmental wellness, personal freedom and the sense of belonging.

5. What America gained from tariff war? Three countries Canada, Mexico and China account for more than 40% of US imports. On March 4, 2025 Trump signed an Executive Order to increase Tariff form 10% to 20% in a general format and 25% in specific format such as electric cars etc. Imposition of these tariff bands end up in increasing the consumer price within USA and does not affect the exporting countries. Moreover, due to this Executive Order US Treasury would gain surplus income of US$ 100 Billion. At the same time consumer price index would go up at-least 2% overall.

Instead of hiding behind trade war it is time for US leadership to improve the national economy and get a sense of balance in playing in the field of geoeconmics. 

 

Cheers!

  

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Tag geoeconomics,

Divide enemies, unite allies

In the late Nineteenth Century German Chancellor Otto von Bismarck adopted a time tested strategy known as “divide enemies and unite allies”, in order to maintain peace in Europe. There was a need to keep enemies such as France and England divided and forge alliances with Russia and the Ottomans. This strategy has implication today in geoeconomics.

In today’s world there are five centres of power. America, China, European Union, Russia and the Global South. England is in a unique position. The Brexit carnage that officially took place on the First day of February 2020 resulted in England’s isolation from Europe on the one side and being relegated as an appendage to America on the other, due mainly to her special relationship with USA in the Anglo–American sphere not standing with the fact her remaining as titular head of the British Commonwealth.

Earlier, at the behest of USA, all five centres, were playing musical chairs in such a way that only America would be seated and the rest standing eternally. This cannot be sustained in the long run due to the intervention of geoeconomics. Simply put American leadership in technology, supply chain, production capacity in terms of manufacturing could not keep up with the development taking place in other three centres, viz., China, Russia and global south.

America’s “divide et impera” (divide and rule) concept that was hitherto working well as demoed by Kissingerian divide between China and Russia lately, fell apart. Added to this is the emergence of global south countries such as Brazil, India and South Africa, wielding their clout in geoeconomics power play. Then came BRICS that made an inroad to this structure, thereby uniting China, Russia and the global south under one flag and the America led west including  EU and England in the opposite camp.

Donald Trump read the tea leaves correctly. He found that individually China, Russia and the global south cannot take on American exceptionalism & expansionism. He also realized all these three power centres understand the logic of Latin dictum “simul stabimus, divisi sumus, labimur” meaning “together we stand divided we fall”. Hence he declared that BRICS as the enemy number one.

Trump appreciated that BRICS is the net thrown over him in the ring of geoeconomics stadium. As a gladiator he has to fight or America will go down on her knees. Hence, his move is to firstly delve into befriending Russia as an urgent matter. For America, the current business strategy of divide and rule need to be re-moulded so that Russian Bear must be corralled first and leave China and the rest for another day!

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

Bury the hatchet and then bury the weakest

This is a classic manoeuvre executed in military as well as in business strategy. It relates to a move towards settling matters with an existing enemy who is emerging victorious and finishing off an ally who is on the verge of defeat.

President Donald Trump came with a shocker recently trying to bury the hatchet America and Russia had for the last few decades resulting in both countries incurring immense loss in terms of opportunity cost in geoeconomics. Russia has the resources America has the technology. If both countries join in their hips to work together in the aftermath of the Soviet Union the situation would have been a win-win one.

Saner counsel did not prevail then. After almost 35 years later Trump is seized and possessed with the Latin dictum “unus pro omnibus omnes pro uno” that means “one for all, all for one” in simple English. Trump is a deal maker and he wants to befriend Russia to get out of the morass America is in the Ukraine contest. Trump knows that the Ukraine conflagration is a black hole wherein previous administration tossed more than 300 Billion USD in cash and armaments.

Imagine the degree of growth this quantum of capital could have elicited if it was invested within the country. Leveraging this capital infusion into US economy would have strengthened the geoeconomics position of America in a big way, not to mention the upping of living standards domestically.

The second limb in this business strategy is to bury the ally who is on the cusp of collapse. Ukraine must and should be buried to improve the prospects of America Russia détente on the one hand and preserve and defend the geoeconomics power spectrum of America on the other.

Burying the hatchet with Russia can have an unexpected winnings this time from China. As Russia and China are fast becoming inseparable duo in the global economics arena and especially in the Arctic zone Trump is quickly moving towards burying the weakest amongst the trio Ukraine as the best course of action. Recent spat between Team Trump with Volodimir Zelensky in the White House Press Conference was meticulously planned and executed to convey this message not only to the globe but to the Western European nations who still root for confrontation with Russia with backstop on America!

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist