Dr. Rafael Marrero from Miami Strategic Intelligence Institute for FinGurú
Why this matters
Reheating old economic grievances: The origin of the myth
The idea that China is on the brink of a global shopping spree driven by the revaluation of its currency and renewed domestic wealth is not new; it is a recycled narrative nearly two decades old. Its roots lie in the Western financial optimism of the early 2000s, in erroneous extrapolations regarding China’s transition to a "consumer economy," and in Chinese state propaganda.
In the early 2000s, after China's accession to the World Trade Organization (WTO), analysts predicted that RMB appreciation would trigger a new era of Chinese consumption and global investment (Bergsten, 2007).
During the 2010s, as China's foreign exchange reserves surged, the media popularized the idea of a "Chinese buying spree," from ports in Greece to real estate in Vancouver (The Economist, 2015; Rhodium Group, 2017).
Chinese state agencies, such as the Ministry of Commerce and the People's Bank of China, actively promoted this narrative to portray China as an inevitable economic superpower.
Despite repeated disappointments, the myth persists, taken up by a new generation of economists who ignore hard data in favor of ideological inertia.
Debunking the five fundamental myths
CLAIM: "China is much richer than believed."
REFUTATION MSI2: China's GDP per capita is approximately $12,500, well below that of the United States, South Korea, or Taiwan. Wealth remains concentrated, with the top 10% controlling more than two-thirds of all assets. Shadow banking and widespread delinquency severely undermine real economic fundamentals (Credit Suisse, 2023; IMF, 2024).
CLAIM: "The RMB is deliberately undervalued and should be revalued to 6:1 or higher."
REFUTATION MSI2: In a free liberalization system, capital flight, market pessimism, and internal instability are likely to drive RMB depreciation. The People's Bank of China intervenes daily to stabilize the yuan and curb downward pressures (Bloomberg, 2024).
CLAIM: "China will shift from a trade surplus model to a domestic consumption and foreign investment model."
REFUTATION MSI2: After a decade of failed rebalancing attempts, consumption remains stagnant. Consumers are saving more amid growing uncertainty, and foreign investment faces increasing restrictions from the U.S. and EU due to national security concerns (Moody's Analytics, 2024).
CLAIM: “A revalued RMB will generate a wealth shock and unleash China's global buying power.”
REFUTATION MSI2: With plummeting real estate prices, youth unemployment above 20%, and consumer confidence at historic lows, any wealth effect is negative. Chinese households are cutting expenses, not spending (National Bureau of Statistics of China, 2024; The Economist, 2024).
CLAIM: “China no longer needs U.S. Treasury bonds; its model has changed.”
REFUTATION MSI2: Beijing's reduction of U.S. debt holdings is defensive, not strategic. The global economy still operates using the dollar. The RMB is not fully convertible, lacks confidence, and cannot replace the dollar’s reserve function (Bank for International Settlements [BIS], 2024).
Strategic conclusions of MSI2 for policymakers
China's economic decline is irreversible and rooted in its failed authoritarian model, not in external forces. The Chinese Communist Party cannot escape demographic collapse, industrial overcapacity, or technological inferiority. The United States must not support this hostile regime through misguided interaction. Instead, we must double down on efforts in national industrial sovereignty, rebuild domestic supply chains, and lead a clean disengagement from the fragile Chinese economic ecosystem. These measures are not optional, but fundamental to restoring American power and protecting U.S. national security (Council on Foreign Relations, 2024; U.S.-China Economic and Security Review Commission, 2024).
MSI2 Policy Recommendations
Maintain and Expand Economic Containment Tools
1. Codify and scale up Section 301 tariffs, especially in strategic sectors like electric vehicles, batteries, steel, and green technology, where China is dumping below cost.
2. Prohibit the transfer of advanced technology intellectual property to Chinese companies through joint ventures, subsidiaries, or foreign acquisitions.
3. Require Treasury-led reviews of all outgoing capital flows and private capital investments that may finance initiatives aligned with the CCP (especially artificial intelligence and biotechnology).
Accelerate the Realignment of Allies' Supply Chains
1. Repatriate key manufacturing to U.S. soil, especially personal protective equipment (PPE), pharmaceuticals, and critical defense minerals.
2. Launch a "Buy American" Industrial Zones Initiative in the Industrial Belt and border states to create U.S.-based alternatives to Chinese suppliers.
3. Condition support for "friendshoring" on reciprocal trade agreements with trusted allies (Mexico, Colombia, Brazil, etc.).
Strengthen the resilience of the financial system
1. Delist all Chinese companies that do not meet PCAOB auditing standards.
2. Prohibit federal and military pension funds from investing in Chinese entities.
3. Authorize preventive sanctions against companies linked to the CCP that contribute to military development, cyber warfare, or influence operations.
Enhance strategic communication and economic diplomacy
1. Expose the coercion and corruption of the CCP in infrastructure and telecommunications agreements in Latin America.
2. Promote alternatives to the BRI led by U.S. private sector with the EXIM Bank, DFC, and nearshoring partners.
3. Use radio resources, social media diplomacy, and pro-freedom messaging from the U.S. to mobilize pro-democracy allies and expose Chinese neocolonialism.
References
Bank for International Settlements. (2024). BIS Quarterly Review. Retrieved from https://www.bis.org
Bergsten, C. F. (2007). The Global Economic Challenge from China. Peterson Institute for International Economics. Retrieved from https://www.piie.com
Bloomberg. (2024). China Economic Tracker: Yuan Pressure Grows. Retrieved from https://www.bloomberg.com
Council on Foreign Relations. (2024). The Future of U.S.-China Economic Relations. Retrieved from https://www.cfr.org
Credit Suisse. (2023). Global Wealth Report. Retrieved from https://www.credit-suisse.com
International Monetary Fund. (2024). World Economic Outlook: Divergent Paths. Retrieved from https://www.imf.org
Institute of International Finance. (2024). Global Debt Monitor. Retrieved from https://www.iif.com
McKinsey Global Institute. (2024). The Rewiring of Global Value Chains. Retrieved from https://www.mckinsey.com
Moody’s Analytics. (2024). China Consumption Outlook: Structural Headwinds Remain. Retrieved from https://www.moodys.com/web/en/us/insights/credit-risk/emerging-markets/china.html
National Bureau of Statistics of China. (2024). Monthly Economic Indicators. Retrieved from http://www.stats.gov.cn
Reuters. (2024). China Real Estate Crisis Deepens as Defaults Rise. Retrieved from https://www.reuters.com
Rhodium Group. (2017). Chinese Investment in the United States. Retrieved from https://rhg.com
The Economist. (2024). The China Slowdown: Hard Landing or New Normal? Retrieved from https://www.economist.com
U.S. Department of Commerce. (2024). Export Control Measures on Strategic Technologies. Retrieved from https://www.commerce.gov
U.S.-China Economic and Security Review Commission. (2024). Annual Report to Congress. Retrieved from https://www.uscc.gov
UN Population Division. (2024). World Population Prospects. Retrieved from https://population.un.org
Rafael Marrero is President, Founder, and Chief Economist of Miami Strategic Intelligence Institute.
Founder and CEO of Rafael Marrero & Company, a management consulting firm specializing in advising entrepreneurs on how to do business with the U.S. Government, the world's richest client.
With 30 years of experience in his field, a graduate of the prestigious Stanford and Cornell Universities, he is a prominent national expert in federal contracting, entrepreneurship in small and medium enterprises, and project management.
Dr. Marrero is also the author of the Amazon bestseller "La sal""Uncle Sam's Secret," the first book in Spanish about contracting and entrepreneurship in the federal sector, written exclusively for the Hispanic community.
Founded in 2008 and based in Miami, Florida, his firm has been recognized twice by the prestigious Inc. magazine as one of the 500 fastest-growing private companies in the United States and as one of the 50 best places to work in the United States, according to Inc. magazine.
In 2016, Dr. Marrero received the Supplier of the Year award, the highest honor given by the National Minority Supplier Development Council to minority-owned businesses in the country. In 2019, his company won the Small Business of the Year award, granted by the Sunshine Awards of the South Florida Hispanic Chamber of Commerce.
Through his talks, articles, seminars, webinars, and radio and television interviews, the distinguished entrepreneur seeks to put his extensive theoretical and practical knowledge at the service of the fastest-growing and most impactful sector in the country's economy: the Hispanic community.
NBC, FOX News, NBC, Univisión, Telemundo, Mega TV, América TeVé, EVTV, SBS, Radio Mambí, Radio Caracol, Zeta 92.3, Bloomberg, The Epoch Times, EFE, and Diario Las Américas are some of the media outlets he has been invited to comment on financing options for small businesses, loans and SBA grants, and the current economic situation.
Before founding Rafael Marrero & Company, he served as Corporate Vice President of MasTec, a multinational telecommunications, energy, and construction company listed on the Fortune 500. He was also the program manager for Latin America at By Light Professional IT Services, a leading project management company that collaborates with the U.S. Department of Defense (DoD).
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