US data underwhelms; China data better strong; China retail about to overtake US retail; world grain prices surge; China caught in ugly fake; UST 10y at 0.84%; oil and gold down; NZ$1 = 70.1 USc; TWI-5 = 72.6

US data underwhelms; China data better strong; China retail about to overtake US retail; world grain prices surge; China caught in ugly fake; UST 10y at 0.84%; oil and gold down; NZ$1 = 70.1 USc; TWI-5 = 72.6

Here's our summary of key economic events overnight that affect New Zealand, with news China's retail economy is about to grow larger than the US retail economy.

But first, the closely-watched Chicago PMI came in lower than expected and a lower than for October. But it is still expanding at a good level, just at slower rate.

And the November update to the Dallas Fed factory survey shows that Texas factory activity expanded in November for the sixth consecutive month, but at a markedly slower pace. There were sharp falls in output growth and new orders.

US pending home sales were expected to have risen slightly in October from September, but in fact they fell. This may mean the expansion of their housing market activity may be topping out.

Canadian building permits slumped in October, down -14% after a record jump the prior month.

China is reporting even better PMIs for November with the factory sector expanding well (52.1) and their services sector picking up the pace faster (56.4). China remains the global COVID engine of growth on which world trade seems to be based.

In fact, retail sales in China reached ¥40 tln (NZ$8.7 tln) in the past year as Beijing raised it focus on its domestic economy (part of its "dual circulation" strategy). Meanwhile, American retail sales totaled NZ$8.9 tln in the past year and the pandemic effects are weighing on recent results. Very soon the Chinese consumer will out-rank the American consumer on the global stage.

And as part of that shift, world food prices are rising sharply, especially grain prices. Chinese demand is taking the blame and food security is China's Achilles heel.

China's continued rise isn't smooth however. Yesterday their central bank had to inject a surprise ¥200 bln (NZ$43 bln) into their banking system to try and calm some of the instability being caused by their high-profile bond default issues by SOEs.

China's relationship with Australia is making news again too, and in an ugly way. Beijing has been caught distributing fake photos of Australian soldiers, all based on an event that only came to light from a free press, something Beijing opposes. The loss of face by Beijing in this incident will make it harder for them to backtrack however. The tensions between Canberra and Beijing have escalated.

In equity markets, Wall Street is ending the month with a -0.6% dip in Monday trade for the S&P500. But that will cap a huge monthly gain of US$2.9 tln or +10.5%. Overnight European markets tumbled about -1.5% although Frankfurt was down much less. Yesterday, Tokyo ended down -0.8%, Hong Kong was down a sharp -2.1% and Shanghai shed -0.5% on the day. The ASX closed down -1.3%, but the NZX50 Capital index was the outlier, rising +1.0% on the day to end the month with a +5.7% gain.

The latest global compilation of COVID-19 data is here. The global tally is 62,924,000 and a +476,000 rise overnight. It is still very grim in Russia, the UK, and Italy with great stress on their hospital systems. It does seem to be easing in Belgium, France and Spain. Global deaths reported now exceed 1,463,000 and up +7,000 in one days.

The largest number of reported cases globally are still in the US, which rose a more modest (for them) +132,000 overnight to 13,760,000. The US remains the global epicenter of the virus. The number of active cases is surging however at 5,377,000 and that level is up +64,000 in one day, so many more new cases more than recoveries. Hospitalisations have pushed up well above 100,000. Their death total now exceeds 273,000. The US now has a COVID death rate of 823/mln and is approaching the Argentine level.

In Australia, they are not getting any major resurgence. There have now been 27,904 COVID-19 cases reported, and that is just +11 more cases over the weekend. Now 61 of their cases are 'active' (-7). Reported deaths however have risen to 908.

The UST 10yr yield will start today little-changed at 0.84%. Their 2-10 rate curve is also little-changed at +70 bps, their 1-5 curve is stable at +26 bps, with their 3m-10 year curve is steeper +77 bps. The Australian Govt 10 year yield is also little-changed at 0.92%. The China Govt 10 year yield is down -4 bps at 3.30%, and the New Zealand Govt 10 year yield is also -4 bps lower at 0.85%.

The price of gold is -US$4 lower today at US$1784/oz.

Oil prices are a little lower today at US$45/bbl in the US, while the international price is now just under US$47.50/bbl.

And the Kiwi dollar has stayed high, but eased slightly to 70.1 USc this morning. Against the Australian dollar we are marginally firmer at 95.4 AUc. Against the euro we are also holding at 58.7 euro cents. That means our TWI-5 will start today at 72.6.

The bitcoin price has set a new record high today of $19,850 although it has settled back from there at US$19213 now which is +6.4% above where it was this time yesterday. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

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84 Comments

Australia seems to have set sail on a course to the West. Will be an interesting journey.

15
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Yes it will. Trump too, in his own convoluted way seemed to be calling for a gathering consolidation of the old guard, the proven and trusted allies of WW2 for a start. A wagon circle if you like, as per the old westerns. Ironically Germany & Japan would now be included, the latter fast becoming a bulwark in the region akin to West Berlin in the cold war.

Well put

22
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I see two rationales behind China's actions as possible justifications; first is Australia is being a proxy for the US. A swipe at Aussie is a side swipe at the US as they are seen as a US puppet in SE Asia. And secondly China is sending a message to all nations who trade with them that it is China they are beholden to for their wealth and economic welfare. Will the WTO have the courage to find against China if that is what the evidence proves when Australia goes to them, China's tentacles reach well into Europe as well. What will be the effect if China decides to hold the world to ransom?

Personally i don't think China has what it takes to hold the rest of the world to ransom, but they can single out individual nations or companies to be expressions of their ire, and these actions can be very damaging in the long run. The problem is the world sat back and rubbed it hands in glee at the easy money when big companies all shipped their manufacturing to China, now the piper has to be paid and taking that manufacturing back will be neither easy nor cheap. No matter how you look at it China's hand is a strong one.

12
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China needs food. Safe and sound protein. Plenty of it. As said in this column an achilles heel. As pointed out by another contributor here a week or so back, it’s when there’s hunger, even before famine, that there’s trouble at the mill. The regime’s greatest fear if the people mass rising.

I agree that one of the CCPs greatest fears is a mass rising of the people, but as Tianamen Square demonstrated, they are not averse to severely squashing uprisings by the people. Besides the news inside China is tightly controlled, and the CCP will do what it sees as necessary to secure it's ascendancy and security. Food may be the trigger for a shooting war.

Abdoulaye Kanté, a Black police officer with 20 years of experience in Paris and its suburbs, is a supporter of the proposed law who also strongly condemns police brutality.

While the Police Officer may have good intentions, he shouldn't have any influence on such matters. Too many stupid people having an input into violations of basic principles that amount to very short term thinking.

No rising, as per just about all revolutions, would hope to succeed without the military mostly if not all supporting. Stalin knew that. Hence the purges which then almost sealed the Soviet’s fate in WW2.

That's true, and I understand that the CCP's relationship with their military gets a little stressed at times. There is certainly some tip toeing over who really holds the power cards there. We have discussed in the past about the US military -industrial complex, but the Chinese one, at least in terms of their internal politics is at least as powerful and influential, and no doubt that Xi is only where he is with their blessing and not the other way around. An uprising of the people with that factored in will not be likely to succeed, but then neither would a shooting war that required the sacrifice of a large number of bodies as that would turn the people against the military very quickly.

17
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That's no biggie, China can just work on buying up all of our farmland. I'm sure farmers in NZ will have no qualms selling them productive land for fiat currency. The Overseas Investment Office will be onboard with the plan too.

Plutocracy, a few things for you to digest.
1: NZ on a good day has the production capacity to feed about 30Mil people - way short of what China needs. It would also need to buy up the exporters - hardly a likely outcome.
2: The OIO already has legislated controls on how and to whom land is sold.
3: China has a restriction on capital outflows currently - probably unlikely to change.
4: Why are you singling out China , when it's actually Canadian and US Pension Funds buying most of the productive farmland in NZ and putting it under pine trees?

Which shows China's savvy, buying diary land/industry has been a method of protecting their populous during tough times and making strategic alliances outside the west for more food production and resources...smart moves.

China shares the same space as Russia with respect to US and it's allies actions.

Dangerous Crossroads: NATO's Attempted Infringement Of Russia's Airspace And Maritime Borders

Duterte’s China policy critics change their tune

It now appears the Philippine president was right not to take a belligerent stance in the South China Sea dispute

Deeply unpopular stance domestically though and it didn't stop the illegal fishing boats plundering their resources. Duterte has now taken an about turn and is working closer with the US as he saw e couldn't trust the CCP. Better the devil you know I guess.

22
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That's low by the Chinese.

Not as low as the New Zealand Government hanging Australia out instead of backing our regional partners this week, but still...pretty low.

27
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Agreed on both topics.
China's propaganda dept is run by child-like megalomaniacs.
And yes, we should stick with Oz and our 5 eye partners and Japan and India and Vietnam etc etc way closer than what we have been doing.
In my view NZ has actually undermined Oz and their position against China.

13
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Like from the other day.
https://youtu.be/T_yoJIYGVmA
- pulling the scrum in multilateral orgs.

Helen Clark is past her use by date.
The performance of elected officials is disgraceful only surpassed by the now non elected leaders.

Helen is definitely in Hilary madness badlands now, running amuck to who/what knows agenda.
# multilateral joke.

14
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Yes I think our position is a disgrace.
But who cares about China, property is booming!!!

13
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The New Zealand Government set up the China Capable public sector programme to attract, develop, retain and deploy China expertise across New Zealand's public sector agencies

Very little on when, what and why but damn; I thought we were a pawn in global geopolitics but this cements our position as a clown!

https://www.mfat.govt.nz/en/countries-and-regions/north-asia/china/china...

14
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They even called it the CCPS, that's hilarious.

'Uninterested'....not totally disagreeing with your stance, but like myself..if I honestly did a tally of items in my house Id probably find the vast majority were made in China...so whose the hypocrite...Put your money where your mouth is. If everyone stopped buying Chinese made goods the CCP would die a quick and natural death...but no..its all about their own pocket book over their righteous ideals. Its all fluff.

19
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The same foreign affairs spokesman who claimed COVID was brought to Wuhan by the US Army personnel. It's a new low. Certainly, CCP doesn't give a rat ass to ethnic Chinese population living in Australia (and other western countries). They want to instigate racial tensions. It's the old trick they played in the 1950s.

In January there were roughly the same number people dying on a weekly basis in the UK as there are now. Are things really "very grim/great stress" or just busy for this time of the year?
https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarri...

Same in the US. No significant increase in deaths overall in 2020.
“All of this points to no evidence that COVID-19 created any excess deaths. Total death numbers are not above normal death numbers. We found no evidence to the contrary,” Briand concluded.

https://web.archive.org/web/20201126223119/https://www.jhunewsletter.com...

This comes with fact checking warnings on social media - does not fit the narrative

17
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Yeah, it's probably normal WITH LOCKDOWNS AND COMPULSORY MASK WEARING. Without those, it would likely be much, much worse. Your blind ignorance of this is astounding.

The US article was written by an authentic researcher from John Hopkins.
The fact remains - no increase in deaths overall.

So those mass graves in New York we have seen on the news are not real, but are a normal event? How are those explained?

It's a normal event so quite easily explained. It is an unmarked grave on Hart Island for unidentified/unnamed dead.
Excess deaths in the US are higher than normal currently, but are not as high as they were earlier in the year when NYC was send covid sick out to resthomes - or early 2018.

"Forty-eight boxes are buried per trench, the boxes numbered and graduated to make it easier to locate and exhume them if a family comes calling—although that rarely happens."
https://daily.jstor.org/burying-nycs-forgotten-dead-at-hart-island/

"Hart Island — located just off the coast of the Bronx — has been used for more than 150 years as a place to bury the city's unidentified or unclaimed dead, or those whose families can't pay for a burial.

New York City Mayor Bill de Blasio acknowledged that the number of burials on the island has increased, but said the only people being buried there are those who have not been claimed by a family member or loved one."

So explain why the doctors in hospitals across America are reporting becoming overrun with patients and are already having to allow non critical patients to die for lack of beds, equipment and staff(many of them also dead from COVID19)?

As I commented earlier excess deaths are above normal now - but talk of mass graves is OTT. Hospitals get stretched during flu epidemics. See 2018 for example, which had a similar death rate to current.
"California hospitals face a ‘war zone’ of flu patients — and are setting up tents to treat them
Hospitals across the state are sending away ambulances, flying in nurses from out of state and not letting children visit their loved ones for fear they’ll spread the flu. Others are canceling surgeries and erecting tents in their parking lots so they can triage the hordes of flu patients."
https://www.latimes.com/local/lanow/la-me-ln-flu-demand-20180116-htmlsto...

Haven't checked the US data. But if you look at the UK data (which the poster is talking about), the number of deaths per week compared to the previous years definitely spiked earlier in the year (for instance: https://www.cebm.net/covid-19/tracking-mortality-over-time-update-12th-may/). They have no reason to believe this wouldn't continue. They are probably getting better at treating and managing the disease, but the UKs actions are what are limiting the death rates. See here for a comparison with a 5 year average: https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarri...

Now imagine if they had zero controls and just let the virus spread to everyone. Because at the moment they are in quite strict lock downs and very strict public health measures.

Zero controls is a myth. People have enough information now to protect themselves and manage their lives. Compare and contrast strict lockdown UK with Sweden.
https://www.euromomo.eu/graphs-and-maps#excess-mortality

Well, it's simple to check and see that there are far more excess deaths in the USA this year compared to the long term average. Scroll to the the graph about midway through the following page to see the thresholds for excess deaths:

https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

Plus remember it takes time for the data to flow through (1 to 8 weeks or more), so the numbers are more reliable the further back you go.

So the researcher completely made up bulls$&t conclusions from data that showed THE EXACT OPPOSITE of what she purported. It is no wonder why the "research" was retracted. How someone could get it so wrong is beyond me.

I recommend checking your sources before deciding what to believe and going down some conspiracy rabbit hole.

Never let the truth get in the way of a good conspiracy theory

The facts stated in the objective article have not been refuted by any researcher or institution.
The article was pulled only because of potential misleading inferences that could be made.

Now you are just making even more stuff up. The very people that published it retracted it with explanations: https://www.jhunewsletter.com/article/2020/11/a-closer-look-at-u-s-death...

"Briand was quoted in the article as saying, “All of this points to no evidence that COVID-19 created any excess deaths. Total death numbers are not above normal death numbers.” This claim is incorrect and does not take into account the spike in raw death count from all causes compared to previous years."

So the very organisation that published the report you are quoting, retracted the report because it was full of inaccuracies.

The report wasn't inaccurate.
Some of the inferences were/are in dispute.
It will be interesting to see the total death rate numbers for the 2nd and 3rd quarters
https://www.cdc.gov/nchs/nvss/vsrr/mortality-dashboard.htm
Currently no great upswing. In fact a quarter in 2018 was greater.

So when your opinion doesn't gel with reality, you ignore reality and start using less accurate graphs to make yourself feel better. Well done...

Are you now disputing the CDC official statistics?
Take a less emotional approach to reality

Are you disputing official CDC statistics? https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

Or will you just keep shifting goal posts by pretending less accurate data is somehow more accurate? This link is showing excess deaths by week for years including up until 2 weeks ago. Your link is smoothing data over long periods and ends on Q1 2020, you know, when the pandemic actually started showing up in the US.

Either you are:
Misreading dates/data and information
Blinding yourself to the truth intentionally
Trying to justify your own inaccurate opinion with inaccurate data

Choose as many from that list as you see appropriate.

Here's some more facts for you to think about to place things in context:
59 million humans will die in 2020 on earth.
https://ourworldindata.org/births-and-deaths
A very small percentage increase on those who died in 2019 or 2018

Right, so you answered my question. You will just keep shifting goal posts...

The data source you mention projects deaths will only be up about a million or so more than 2019. Who gives a crap about those million right? The point is the statistic is worthless. You can warp statistics to whatever cause you want. Based on taking the increase in world population growth into account there may be a less percentage of the total population dying of all causes in 2020. However, using that statistic to debunk covid has about as much connectivity to the subject as trump does to the truth. I presume you are just taking the mickey because you are bored.

And these are the most likely causes of death this year:
https://www.who.int/news-room/fact-sheets/detail/the-top-10-causes-of-death

Heart disease is the big killer.
Let’s track those deaths on a weekly basis.

C'mon MB how are you going to ram through new holidays, prisoner voting and abortion under the cover of boring old heart disease?! Some governments increased ICU capacity during the pandemic - and some extra kind governments focused on forcing through pet projects under urgency.
"By far the most significant health law change in recent times and something that would no doubt have been front page news but for the lockdown, the Abortion Legislation Bill came into force on 24 March 2020."
https://www.buddlefindlay.com/insights/outside-the-bubble-decriminalisat...

Would the MoH announce at 1pm daily the number of unborn kiwi children killed each day?

Maybe learn what fallacious reasoning is, then think about why you keep using it.

yep..probably the same article that referred to statistics up until March 30 2020 when there was virtually no covid in the USA. This conspiracy theory was debunked months ago..only the uneducated masses of trumpty dumbties cling to this kind of wacked out idiotic falseness. In the USA the updated statistics are showing at least 24000 to 79000 MORE deaths year over year as of October 14 OVER and ABOVE the 280000 deaths attributed to covid.And all this two months ago before the latest and biggest infection increases.. You f...ing morons need to do even the most basic research before passing on these pathetic conspiracy theories, you just show how STUPID you are.
Oh, So the whole world is just covering up a big hoax so all their economies can tank...can you get more stupid...I don't think so. I live in the USA and there is one person dying every 30 seconds from Covid with many more dying of other illnesses over and above the norm because they don't want to go to hospital. WAY ABOVE THE NORM. MORONS. It is people like this that perpetuate social media lies that do a grave disservice to mankind by spreading these such unadulterated bullshit. Sorry for the rant on a subject that has nothing to do with the above article but someone has to call out these far right hate groups and their misinformation campaigns to undermine democracy. Wake up people and turn off fox entertainment. Idiots. It is so easy to check the facts.

Great vent! Used to live and work there too. You echo exactly the sentiments and fear that we are receiving from our friends in our neighbourhood. We used to drive through the skeletons of townships destroyed by the like of yellow fever or diphtheria in the 19th century and earlier. This though is across the board, coast to coast and even in our modern age, impact on health systems and the community is drastic.

Yep, it's hard to argue with people who are trapped in their own little conspiracy theory echo chambers. They use logical fallacy after logical fallacy to try and justify their delusions. Then call everyone else "sheeple" for believing objective data (or objective reality, choose whichever you want). They can't be reasoned with, because it appears they have abandoned reasoning skills, unable to be objective about their information sources or use simple logic/analytic skills. It's the sort of people dictators (or wannabe dictators - Turnip, sorry Trump) love because they can say anything and the simpletons eat it up. This trend should scare us all...

A great example above, where real data is ignored, then goal posts continually shifted...

Talking death only is not helpful. You need to factor in the lifetime damage done to the body and unknown long term affects.
Might I suggest a working holiday to a UK covid ward?
I'm sure you could get a specialist role, as you are an expert on all matters.

Inflation is in plain sight rising
No one seems to think this will amount to much
I reported some months ago that USA anc China food prices, esp grain, would rocket in 2021 due to flooding in USA and pork troubles in China. Add all massive stimulus and inflation inevitable. So will they raise rates? Ha. If not real wages will fall

19
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China colours been clear to some for a while
Just like Japan and Germany in 30s. No one liberal wanted to admit what was going on

People just can't see beyond the daily life grind.

Congratulations to all the bitcoin bulls! See you at $100k!

Yep looks like we're going over 20k this week. Keep hodling.

There's not going to be an opportunity quite like Bitcoin for another 80-100 years. You just can't see it yet

So what's your exit strategy?

The death of the Fiat currencies experiment in about....some time within my lifetime.

The second my total value is enough for me to retire (or at least seriously downsize my work) I'll start selling. Probably in 20% chunks. Not too far away now

Nice - just make sure you account for and actually PAY the tax liabilities, might stretch your horizon a bit. having said that - well done, I admire people who take a risk and follow their convictions

what will you convert it into?

It's stretching it a bit to get all outraged over the photo being "fake' or "doctored" It's obviously just a meme or propaganda image intended to graphically represent Australian activities in Afghanistan. No sensible person would discount the accusations just because of that. Grasping at straws.

The Australian government should have just ignored China instead of potentially making things much worse for themselves. No it's not okay to commit war crimes if you have a "free press". The Australian government themselves have called the actions of their soldiers appalling and unforgivable. There is no reason why the Chinese government cannot agree with that assessment.

18
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The same Chinese government that tells everyone to stay out of their domestic issues when they mention Hong Kong or Uyghur detention camps? They can't have it both ways

The Afghanistan thing is not a "domestic issue", rather an international issue. China has a common border with Afghanistan. It's very easy for China to accuse Australia of being an "imperialist running dog". That's why I would suggest Australia tone it down a little concerning this particular issue.

10
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I think you would find that the CCP thinks that they can have it anyway that they want. That’s what they tell themselves and that’s what they tell the people. This is propaganda at play, not too dissimilar to Nazi Germany’s ideological capture of the youth. The regime arrived in 1949, that means all those seventy, and up to eighty too, have not been allowed to know anything different other than what they are told by the CCP. Near to 1.5 billion people indoctrinated and subjugated. There it is.

you forget the South China Sea.... oh right i forgot that's also a 'domestic issue'

Oh my god.

The crimes the Australian troops committed in Afgan are so awful and inhuman!

The global communities should stand up firmly to against such atrocity!

Yes they are, but that is what you get when you lack good solid leadership which is rooted on sound, humane international standards. Tell me Xing - is the PLA and the CCP capable of living up to those standards? After all China does know what it is like to be on the receiving end of forces which don't.

12
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Yes, they are truly appalling.
And the Australian government has investigated, and is treating them as crimes, as they should.
Would the Chinese government do the same? Are they capable of admitting to error?

(dp)

Oh my god

The crimes committed by the CCP in East Turkestan are so awful and inhuman.

The global communities should stand up firmly to the reappearance of fascism, as we all know what happens when dictatorships start stuffing specific minorities into concentration camps.

Stones *something something* Glass Houses

"Food security is China's Achilles heel." Hmm, maybe alongside:
1 Rapidly ageing population
2 Environment degradation especially water
3 Getting offside virtually all its neighbours (except Vlad), and increasingly non-neighbours
4 A population that is getting more educated but is not going to reap the benefits of that
5 International push-back against its increasingly state-oriented businesses and tech.
etc etc

Ummm...they actually have many more allies that just Russia. Luckily for them they have been making friends while America has been interfering in so many other nations political and economic systems for the worse that they now have quite a network to back them up if necessary. Don't assume they are weak. Think South American nations, Middle Eastern nations, African nations, South East Asian & Pacific nations etc

How will their educated population not benefit when they have a huge domestic market to work within and other non western allied nations to trade with?

Bribes to top officials don't necessarily mean they've created allies...

No but they are in thick with the regime in Iran and there is a strong mutual economic and strategic rationale at play with that. So with recent events hotting up things in Iran, the potential of the connection becomes even more volatile, ie big oil supply at stake. Oh, and China might “offer” some nuclear assistance now needed too, being in that game themselves.

Chinas too polluted, poor, and starving to bother about. Now get back to work and make my cheap t-shirts and LED foot massager.