IMF discusses inflation trends in the global economy
Moscow and Beijing’s new alliance has appeared to backfire on Vladimir Putin, who made a terrible “mistake” by cosying up with China as its economy tanks, Daily Express US has heard.
China’s meagre post-Covid recovery has been scuppered by a major property crisis that has coincided with plummeting exports and slashed consumer spending.
Together with alarming rates of youth unemployment, the Chinese economy appears to be dying on its feet and Beijing has even stopped publishing the figures.
As the superpower falls from grace, it is appearing to have a major knock-on impact on its new eastern ally, according to University of Ottawa Professor Ivan Katchanovski.
The Ukrainian-Canadian political scientist said that while China’s economic tumble won’t impact the political and military elements of the new alliance between Putin and President Xi Jinping, Moscow’s already battered economy could take a further hit.
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Prof Katchanovski told Daily Express US: “China would remain the main trading partner of Russia and would help it to weather the Western economic sanctions both for this geopolitical reason and because it can get a lot of Russian oil and gas at discount.
“But the slowdown of the Chinese economy can reduce demand for imported Russian oil, which would negatively affect the Russian economy. The recent Russian currency drop was a sign.”
The Russian ruble fell to its lowest point in almost 17 months this August, prompting Russia’s central bank to announce an emergency meeting as it scrambles to avert a crisis.
Russia’s currency has plunged 26 percent lower this year due to plummeting export revenues and ramped up military spending to fund the war in Ukraine.
Meanwhile, strong sanctions slapped on its energy sector mean fossil fuel exports to Europe have also been slashed. This dealt a major blow to Moscow, which raked in billions of revenue by controlling the continents fuel supplies.
China was primed to step in for European Union member states, who have since found alternative options. Now, Biejing buys Russian oil and gas at a discounted price.
According to a former Defense Intelligense Officer Matt Shoemaker, Putin has “backed himself into a corner” and made a huge mistake by strengthening ties with Xi as the Kremlin’s once vast energy revenue appears a shadow of its former self.
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He told Daily Express US: “Russia is caught between a rock and a hard place, with China and India the two main buyers (of its energy exports).
“There is a very large risk that Russia has right now.
“They are essentially beholden to the demand of China to keep their economy afloat because 50 percent of the Russian Government’s expenditures are provided just from the sales of oil and gas.
“But Putin backed himself into a corner, he did this to himself, once he pulled the trigger and invaded Ukraine. Once all these sanctions were turned on, the only option he was left with was to focus on China and India…in that sense it is a mistake.”
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