China and EMEA

Isn't it easy, obvious and satisfying to blame issues on someone else? We did it in school ("the teacher hates me") and the US did it on a host of countries, Germany, Japan and now China related to trade issues ("their currency is undervalued or being manipulated on the world market").

But look at the facts - China has made consistent investments in emerging markets including Eastern Europe, Africa and Middle East (EMEA) region even during the difficult 2008-2009 period to emerge as the dominant investor and trade partner of the region replacing the USA and almost Germany as key trade partners for the region.

This represents a strategic direction of China to secure raw materials for its production facilities - and it stays the course. They continue to invest.

Post Road Advisors performed an analysis and indicated that far from retreating in the crisis - China continues to expand trading and investment in the EMEA region (see graphic above).

The USA, on the other hand, is falling further and further behind in trade with the EMEA region. What will help? Well the devaluation of the US Dollar will certainly make things from the US cheaper - but the question is - who wants to buy US goods?

In a poll on Thursday NPR interviewed several South Koreans in the wake of Mr. Obama's visit. No speaker was remotely interested in a US car and preferred Asian - even the hated Japanese - over a US vehicle. So it seems that only Americans are willing to buy GM cars.