Here are the two contrasting styles of engagement with foreign nations that China and the United States are currently pursuing:

• China building - China is lavishing hundreds of billions on helping to build up emerging market economies in Eurasia, South and Central America, and the Asia-Pacific region, essentially ensuring itself of essential supplies of major commodities, excellent supply routes, and international goodwill for decades, if not centuries to come (the Chinese are always taking the long view – the very long view – of things)
• US Bombing - Meanwhile, the US is busy spending billions of dollars that it doesn’t really have to spend (We’re $35 trillion in debt!) propping up Ukraine, creating enmity with Russia and China, and threatening countries that don’t toe its foreign policy line with financial sanctions, tariffs, or drone-fired missiles – (It has not, apparently, been studying Dale Carnegie’s book, “How to Win Friends and Influence People” anytime recently)

What benefit, tangible or otherwise, does the US obtain from its dragging-on-forever-now-with-no-end-in-sight support of Ukraine? Personally, I don’t see any. And even if there is some benefit buried under all that mess somewhere, is it substantial enough to even remotely begin to compensate for the monumental bad will boiling over with Russia? – or for pushing Russia into an ever-stronger alliance with China and the other BRICS countries?

As if that situation weren’t bad enough, there’s the extremely dicey military situation in the Middle East that the US is in. I do think we have an obligation to stand by the one nation, other than England, that has always stood by us – Israel. But can we really risk falling into an open military confrontation with the whole Muslim juggernaut of Iran, Syria, Lebanon, Egypt, Saudi Arabia, and maybe a few other ugly, turban-wearing guys? – all at the same time that we’re burning up hundred-million-dollar fighter jets in Ukraine and maintaining a dangerous dance of death in the South China Sea, pledged to defend Taiwan against an invasion by China (something that, if it ever comes down to it, we can’t possibly manage to successfully pull off)?

China Advances its Own Economy by Helping Create a New World Economy

With the increasingly powerful BRICS alliance, the Shanghai Cooperation Organization (SCO), and its Belt and Road Initiative, China is successfully fueling its economic growth. And it’s doing so by taking actions that are helping to lift hundreds of millions of people up out of poverty and into a new and growing middle class – and helping formerly third world nations transform into rapidly growing emerging market economies. Thus, China is making money while making friends and forging important trading partnerships all across the globe.

While the US is throwing money away hand-over-fist, seemingly utterly devoid of any purposeful plan, China is making dozens of strategic investments designed to boost both its own economy and the economies of developing countries. Its “Belt and Road Initiative”, centered primarily in the region of Eurasia, is an ongoing multi-national project aimed at repairing, rebuilding, and improving the famous “Silk Road” trade routes connecting China to Western (and Eastern) Europe. In return for access to key commodities and free trade agreements, the Chinese have graciously poured billions into major infrastructure projects – such as roads, rail lines, and ports - in several countries.

The Port in Peru

One of China’s recent moves involves extending its Belt and Road Initiative across the oceans, into South America. Peru is the fortunate beneficiary of China’s latest attempt to reduce international trade costs and feed its growing appetite for silver. China’s relentless quest to massively increase its gold reserves is well known. Not so well publicized are the moves that the Chinese are making to also stack up larger and larger piles of silver. China already has a huge level of industrial demand for silver – and, apparently, it envisions that need for silver only growing larger in the future.

The Chinese have invested approximately $2 billion, with more money to come, in port facilities for Peru’s Chancay Port – as the Silver Academy eloquently phrases it, “seeking a modern El Dorado of trade and influence”. China’s President, Xi Jinping, personally led a delegation to Peru to celebrate the Chinese financing for the port. Over the next decade, China expects to make a total investment of nearly $4 billion in the Chancay Port project.

China’s “Silver Road” Initiative in Chancay, Peru

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The new port facilities will make international trade between countries in South America and Asia easier and more efficient. Specifically, the Chancay Port will make it easier and less costly for China to import tons of silver from Peru and other South and Central American countries. China’s central bank has been very busy recently, buying up silver as fast as South American mining companies can pull it out of the ground.

China’s investment in Chancay is a huge boost for Peru’s economy. China’s President Xi has forecast that the major infrastructure project – which includes 15 container ship berths – will provide nearly 10,000 jobs for Peruvians and could eventually generate nearly $5 billion annually for the country.

The benefits of creating such a major South American shipping center are likely to extend beyond the borders of Peru. There is already talk of a possible additional South American Belt and Road Initiative project – a new railway line that would connect key shipping centers in Brazil with the port.

China has been on a huge spending spree, paying top dollar for silver dore’ and concentrate in Peru, Bolivia, and Mexico. It’s using the Chancay Port to ship all that silver back home to China, where it will be refined. Not content with just being the second largest silver mining producer in the world, China is now also importing nearly 10,000 tonnes of silver annually. Its investment in shipping facilities in Peru, and willingness to pay well above current market prices for even unrefined silver, indicate just how strong China’s desire is to secure for itself a steady stream of massive amounts of silver.

China’s Silver Demand – Strong and Growing

Here at True Gold Republic, we’ve watched continual buying from China help propel gold and silver prices higher. And we don’t expect the Chinese to end their precious metals shopping spree anytime soon.

There’s no mystery to China’s huge appetite for silver. In addition to needing massive amounts of silver for every other conceivable industrial use, China is the world’s largest producer of photovoltaic (PV) cells for solar panels. According to the Silver Institute, photovoltaics account now for upwards of 15% of total annual silver demand – more than 200 million ounces of silver each year. PV silver demand worldwide has more than doubled in just the past three years.

Overall industrial demand for silver continues to grow at a feverish pace. Total industrial silver demand for 2024 is estimated at 710 million ounces. That’s up from just 509 million ounces in 2020 – an increase of nearly 50% in just four years’ time. Meanwhile, silver mining supply has seen virtually no increase at all. Total silver mine production in 2021 was roughly 829 million ounces. Total silver mining production in 2024? – an estimated 823 million ounces.

And China is on the cutting edge of many technologies that are finding new uses for silver every day. The electroplating industrial park in Zhejiang Yueqing City uses more than 2,000 tonnes of silver every year, according to data from the Shanghai Futures Exchange. And that’s just one of China’s industrial parks.

China, of course, isn’t alone in having a strong motivation to acquire silver. Every industrialized country in the world is finding itself needing more silver each successive year than it needed the year before. India is importing silver at virtually the same high rate as China. Those two countries combined are expected to take up more than 70% of 2025’s total projected silver mining supply. And Russia recently announced that it tends to acquire substantial silver beyond its industrial needs, to add to its strategic financial reserves.

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China is Building Economic Bridges While the US Bombs and Burns Bridges – Conclusion

China’s substantial investment in Peru's Chancay Port represents a major strategic economic initiative on the part of the Chinese. The Chancay Port project will undoubtedly strengthen China’s trading relationship not just with Peru, but with the whole of South America. And the Chancay project is just one project among many that China is utilizing to reshape the global international trade map, shifting economic power away from the West and toward the East, and securing China with supply lines for valuable commodities such as gold, silver, and agricultural products.

While the US is wasting money on ham-handed and misguided foreign policies, China is using money to build relationships and forge economic alliances that offer mutual benefits for both China and its international trading partners. Those partners, such as Peru, will, no doubt, be appreciative of China making multi-billion-dollar investments to help grow their economies and raise the standard of living for their citizens.

China’s approach stands in stark contrast to that of the United States, which appears more inclined toward making economic threats to countries that do things that the US doesn’t like. Query: If you were the head of an emerging market nation, which country would you be more likely to act favorably toward?

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(Trivia tidbit – more on US financial and foreign policy woes: The Pentagon FAILED a financial audit - for the 7^th year in a row. Roughly 60% - about $2.4 trillion of a $4.1 trillion budget - is “unaccounted for”. Yes, you read that right – the Pentagon seems to have somehow misplaced $2.4 trillion (maybe it just fell out of a pants pocket??). That’s the official position anyway. It’s possible that they DO know where all that money went, but just don’t want the American people to know – perhaps somewhat like the Federal Emergency Management Agency (FEMA) didn’t want to admit that it had diverted more than $600 million that was supposed to be available for disaster relief to housing and feeding illegal immigrants.)

• J.B. Maverick

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Sources:

https://substack.com/home/post/p-151796690?source=queue

https://thesilverindustry.substack.com/p/china-silver-imports-surge-to-9000

https://www.cnbc.com/2024/04/22/ukraine-given-reprieve-with-us-aid-package-after-months-of-delays.html

https://silverinstitute.org/silver-supply-demand/

https://substack.com/@thesilveracademy

https://www.bbc.com/news/world-asia-china-67120726

https://www.china-mike.com/chinese-culture/in-out-groups/

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