China will be more pragmatic with Europe than it has been with the U.S., strategist says

But it's actually the job market isn't that bad right now. You can still get jobs. What a bigger problem is frankly, Steve, is that salaries are low. So if people are asking for say 10,000 RMB three years ago, they're now asking for 8000 a month and starting salaries. So starting salaries have dropped 15 to 20%, which is why you're seeing the D word or deflation is flaring up it's warning signals into China because consumers are still trading down, cutting back on big ticket items, especially houses. The real estate market is still a mess with prices down 2030% and volume transactions almost nil. So the concern is not unemployment, but maybe underemployment. Sean, terrific to explain it there. Let me just push on to FDI because it feels as though China has been putting up the sign open for business. Europeans you point out are interested, but not Americans at this stage. But has anything changed in the past week and has anything going to change in months to come? Because it feels as though we've got these EU tariffs now on electric vehicles out of China. We've got a countdown to U.S. presidential election. Perhaps some of the narrative that we've seen of better relations even with Europe has come from that leadership with the Americans, where they've been more conversations in recent years between the US and China to repair relations. Does all this change later in the year with a potential Trump administration already when we've got more tariffs and EU changing its policy and industrial policy? It's great to see you, Karen. I don't think we've spoken in 10 years and the last time we spoke 10 years ago, China was awash with pollution. I think we spoke around 2013 when Prada did their IPO. At that stage, a lot of Chinese refused to go outside and do running because the pollution was so bad. I almost left my family and had us move outside of China. So China over the last decade has really invested heavily in Nevada's in order to have strength and power on a new technology, but also to reduce pollution. So right now, as Sam said before, the Chinese government and the Chinese people feel that the tariffs on Chinese Nevada's is hypocritical. For decades, Europe, for decades, the United States criticized China for high pollution. So when China did something great, Nevada's that could really reduce pollution to not just in China but globally, all of a sudden the Europeans and the Americans are slapping tariffs. They're calling it unfair trade, lots of subsidies. But when you look at it, the United States with the Inflation Reduction Act is launching about 300 billion of subsidies, which is the same amount that the Chinese government has directed towards the Nev sector. So that's sort of a long winded answer saying that China feels that they're being accused unfairly for doing what the West wanted. So with the new tariffs that the Biden regime has slapped on to Chinese NE VS at 100%, that means the Chinese are going to look towards Europe and they feel that there's a lot of hypocrisy dealing with Europe, with Europe saying when they were dominant with Mercedes, BMW, Porsche, Rolls Royce, Ferrari, remember, for all five of those brands, China's the largest market in the world. For them, it's unfair for China not to be allowed access to sell their enemies into Europe. So I expect there's going to be a pushback. You're going to see China will slap tariffs on engines that are above 2.5 liters. So I think Porsche is going to get hit hard with maybe a 25% tariff. And I think that some of the French pork and other pork products are going to get hit hard. But what's key is I don't think China's going to push back that hard against Europe because they still want FDI coming in from Europe. China's economy is weak, let's be honest. So they need to have the billion dollar investments from BASF, from BMW, from Mercedes, and continue to encourage the czars of the world to expand into China. So we're seeing some political pension, but I think China is going to be a lot more pragmatic towards Europe than it has been in the United States, where they're trying to show the US that they can't be bullied about. I think China will be more pragmatic with Europe.