PROVING that economic sanctions does not work but only produces a ‘boomerang effect’ and that there are opportunities in the midst of crisis, trade between Russia and China continues to boom despite the ongoing war in Ukraine even as reputable American banks and economists are warning that the United States is headed for an economic recession by next year, 2023.
According to reports by the Western media, which have always been anti-Russia and anti-China, Russia last month surpassed Saudi Arabia to become China’s largest source of petroleum.
China imported 8.4 million metric tons of crude oil from Russia in May, compared with 7.8 million metric tons from Saudi Arabia, according to data released on June 20, 2022 by China’s General Administration of Customs.
The volume of Russia’s crude oil exports to China grew by 28 percent from the previous month, hitting a record level for its trade with China.
But Saudi Arabia remained the leader by revenue, taking in $6.3 billion for its crude oil sales to China last month, versus Russia’s $5.7 billion, as sanctions pushed down the price of Russia’s exports.
The United States has mobilized its minion-states in Europe and elsewhere to impose economic sanctions on Russia by banning the import of Russian oil and natural gas but this instead boomeranged on Western Europe and created divisions as most of Europe are dependent on the supply of Russian natural gas to keep their economies moving, especially Germany.
Aside from China, other countries who ignored the US call, like India, have profited by their decision to directly trade with Russia, especially on the supply of oil. India has labeled the US and Western Europe’s effort to pressure it not to do business with Russia as “hypocrisy,” noting that the Western powers continue to buy Russian oil and gas despite agreeing to sanction Russia.
As if telling the West that China cannot be compelled to join in their anti-Russia alliance, Chinese President Xi Jinping, speaking via video at the St. Petersburg International Economic Forum on June 17, 2022, proudly told the delegates that cooperation between Russia and China (is) rising” with trade between the two countries in the billions of dollars in the first half of 2022.
China’s customs data showed that trade between China and Russia totaled $65.81 billion in the first five months of this year, up 28.9 percent from a year ago.
Most of the growth came from Chinese imports from Russia, especially petroleum products.
China-Russia trade reached $147.9 billion in 2021, a 35.9 percent increase from the previous year.
Even as the economies of Russia and China continue to boom amidst the ongoing military conflict in Ukraine, the United States is headed towards an economic recession by 2023, warned three major US investment banks and expert analyst who presented their papers at the World Economic Forum annual meeting in Davos, Switzerland held from May 22 to May 26, 2022.
With the US to hold its midterm election this November that can decide the control of the Democratic Party in the US Congress and its economy headed for a recession, Pres. Joe Biden is also suffering from poor approval ratings with 56 percent of Americans disapproving his performance and 67 percent believing that America, under Biden, is “in the wrong track.”
According to the paper submitted during the Davos meeting by Jeremy Siegel, Susan Wachter, Nikolai Roussanov and Itay Goldstein, all from the prestigious Wharton University, the US economy has started to show unmistakable signs that it is headed for an economic recession.
Last month, US inflation was pegged at 8.6 percent, the highest thus far, forcing the US Federal Reserve Board to increase its interest rate by 75 basis points, the biggest since 1994.
This triggered an increase in commercial banks’ interest rates greatly affecting the US mortgage (housing) sector and even the cost of retail goods such as food.
A ‘recession’ is typically defined as two consecutive quarters of negative economic growth. Rising interest rates tend to hurt both stocks and growth because they curb consumer spending.
A survey of 525 investors by Wharton disclosed that 48.4 percent of the respondents believed the US economy is sliding to a recession by next year, while only 15 percent said the recession would come any time this year.
This view is shared by economists at Morgan Stanley, Wells Fargo and Principal Global Investors who all warned of the coming economic recession, a possibility that Pres. Joe Biden would not want to happen because of the coming US midterm elections this November.
According to a Yahoo! News/YouGov poll, 56 per cent of respondents in a survey of 1,541 adults from June 10 to June 13, 2022, said they either somewhat or strongly disapproved of Biden’s performance in office while only 39 per cent either strongly or somewhat approve of the president’s job performance.
The same survey also showed voters strongly pessimistic about the direction of the US at this time, with more than two-thirds of respondents – 67 per cent – opining that the US was on the wrong track. Only 21 per cent of overall voters said the US is currently headed in the right direction.