With the changes in the global economic situation and the adjustment of the geopolitical landscape, the world's two largest economies - the United States and my country - are experiencing completely different destinies.

On the one hand, Federal Reserve Chairman Powell is worried about the imminent collapse of the U.S. bond market, while on the other hand, Wall Street's confidence in my country's market is high and people are turning to the RMB and Chinese assets.

What kind of economic and political game is hidden behind this? Why is the attention of international capital beginning to turn to the East? What far-reaching impact has my country's economic and military display had on the world? These questions are worth pondering.

Background of the US debt crisis and the risk of recurrence

In 2024, the U.S. Treasury market is once again under tremendous selling pressure. Although the Federal Reserve has announced a series of monetary easing policies and even cut interest rates in mid-September to increase market liquidity, Treasury prices are still falling, and there are hidden dangers of a debt crisis.

Looking back at history, on October 15, 2014, the U.S. bond market experienced a "flash crash" event that shocked the market. On that day, U.S. Treasury yields suddenly fluctuated sharply, causing market panic.

One of the main causes of that incident was the involvement of high-frequency trading and anonymous capital, but the deeper reasons behind it still point to the backlog of US debt problems.

Today, the U.S. Treasury market is also facing a sell-off. On September 26, 2024, Federal Reserve Chairman Powell once again expressed his concerns about the debt market at the U.S. Treasury Market Conference.

He pointed out that the selling pressure in the bond market has increased significantly, and the instability of the market is becoming increasingly unpredictable. The US national debt burden continues to increase, not only because of the government's fiscal deficit problem, but also because global investors' confidence in the US economic outlook is declining. The market generally expects that if the US bond market cannot remain stable, it may trigger a new round of global financial turmoil.

Despite Powell’s repeated calls for markets to be alert to potential collapse risks, the political infighting in Washington has left little time to focus on the pressing issue of market collapse.

The Democrats and Republicans are busy attacking each other and competing for votes in the upcoming election, while ignoring the increasingly serious debt problem.

As the US election approaches, the political arena becomes increasingly noisy. The Democratic Party and the Republican Party have launched a fierce confrontation for voter support, policy differences have intensified, and decision-making has stagnated.

Especially on economic issues, the two parties hold different views and find it difficult to reach a consensus. Issues such as economic stimulus, tax policy, and debt ceiling have become the focus of partisan struggles, and these internal struggles have weakened the US government's ability to respond to external challenges.

Powell's warning is not without reason. The size of US debt has exceeded 31 trillion US dollars, and the government deficit continues to expand. If effective measures are not taken, the collapse of the debt market will be inevitable.

Nevertheless, the focus of American politics is still on the election, and the debt issue has been temporarily put on hold. This internal deadlock is in sharp contrast to the high risks in the external financial market.

The Fed's interest rate cut policy seems to have boosted the market in the short term, but in fact it is just creating an illusion of economic prosperity. On the surface, the US GDP growth and core consumer price index are acceptable, and the number of unemployment benefit applications remains within the expected range, but behind these data, there are structural problems.

Volatility in the capital market, declining consumer confidence, and the gradual emergence of a debt crisis are all risks accumulating within the U.S. economy.

RMB Strengthening and Capital Inflows into my country

At the same time, our country’s market has shown a completely different trend. On September 26, 2024, the offshore RMB exchange rate broke through the key psychological mark of 7, with an increase of 3,463 basis points. The significant growth in the RMB exchange rate shows that global capital's confidence in the Chinese market has increased significantly.

Against this backdrop, Wall Street's heavyweight investors have turned their attention to the Chinese market. Represented by the famous hedge fund manager David Tepper, more and more capital tycoons are selling their US dollar assets and buying RMB and Chinese stocks instead.

The reason is that they believe that my country not only has greater room for monetary policy operations, but also that the Chinese government has shown greater ability and determination in dealing with economic challenges.

Tepper said in a public speech in September 2024: "Our monetary policy has not reached its limit, and the government still has ample tools to maintain economic stability."

Tepper's view has been recognized by many international investors. Unlike the United States, which is under heavy debt pressure, my country's fiscal policy is more flexible and the government's control of financial risks is more effective.

This has rapidly increased my country's attractiveness in the global capital market, and international capital has poured into my country, betting on the long-term development of my country's market.

What is more noteworthy is that my country's stock market has also achieved substantial growth in the round of capital flows. Many technology companies and infrastructure companies have benefited from the injection of international capital, and their stock prices have risen sharply. The appreciation of the RMB has also further strengthened the confidence of international investors in my country's market.

Not only in the economic field, my country has also demonstrated its strong strength in military demonstrations. In September 2024, my country successfully launched an intercontinental ballistic missile with a range of 12,000 kilometers and accurately hit the intended target. The missile launched this time is worth 2.5 billion yuan, demonstrating my country's major breakthrough in the field of military technology.

The successful launch of an intercontinental ballistic missile has attracted widespread attention around the world. Especially when the United States is busy with internal economic and political issues, my country's military display is undoubtedly a powerful deterrent to other countries in the world. This is not just a simple military test, but an important move for my country to enhance its presence in the global political landscape.

International analysts generally believe that my country's military display is not only a response to external military pressure, but also a strategic display of its confidence in its global influence. The confidence in its global influence not only stems from the strong performance of my country's economy, but also reflects the continued growth of my country's military strength.

At the same time, the Chinese government has also adopted a series of policies in the financial field, further enhancing the trust of international capital in my country. Through prudent monetary policy and financial supervision, my country has prevented excessive fluctuations in the domestic financial market, thus providing a more stable investment environment for international investors.

The series of measures taken by my country show that in the context of increasing uncertainty in the global economy, my country still has strong risk resistance.

The reversal of the national destiny: a comparison between China and the United States

Amid the turbulent global economic and political landscape, the fortunes of China and the United States seem to be reversing. On the one hand, the internal political divisions and economic difficulties of the United States have called into question its position in the global financial market.

Although the Federal Reserve has tried to maintain market stability through interest rate cuts and other monetary policies, the shadow of the debt crisis has always loomed over the U.S. economic outlook. Powell's warning undoubtedly reveals the huge risks hidden in the U.S. economy.

On the other hand, my country has shown strong growth momentum in both economy and military. The influx of international capital, the appreciation of the RMB and the prudent decision-making of the Chinese government have demonstrated my country's dominant position in the global economy. At the same time, my country's military display has further consolidated its dominant position in the international political landscape.

This reversal of destiny did not happen overnight. Looking back over the past decade, the economic and political trajectories of China and the United States have gradually diverged.

The debt problem and political infighting in the United States are intertwined, causing its domestic and foreign policies to fall into a dilemma. However, my country has gradually taken the initiative in the economy and military through a series of adjustments in its internal and external policies.

The gradual change in gaining the initiative in economy and military will not only affect China and the United States, but will also have a profound impact on the global landscape.

Powell's warning and the choice of Wall Street capital reveal the profound changes in the current global economic landscape. The shadow of the US debt crisis has not yet dissipated, and my country's momentum of rise is becoming more and more obvious.

The divergence of the two countries' economic trajectories seems to indicate that the flow of global capital has reversed. In the complex international environment of global capital flows, governments and investors need to reassess their strategies and embrace a more multipolar world.