America’s banker visits it’s grocer in the coming week. When China Vice President Xi Jinping tours the U.S. his itinerary includes expected stops in Washington, DC and California. But he’s also scheduled to stop in Iowa. Usually that’s flyover country.
Xi is expected to be the next leader of China. His country’s appetite for American IOUs is key for keeping interest rates low. China owns more than $1 trillion of U.S. government debts guaranteed by taxpayers making it America’s biggest foreign banker.
But America is China’s grocer. Feeding more than one billion people takes an enormous amount of resources and infrastructure. And that means big business for American agriculture.
The amount of home grown corn, soybeans, wheat and other crops shipped to China is up 77 percent compared to last year. China needs American grains to continue feeding it’s economic growth. That’s one reason why the likely new leader of China has Iowa on his travel schedule. Iowa sells hundreds of millions of dollars of corn to China each year. That money supports jobs from farm fields to manufacturing to shipping ports. It means profits for those investors.
A secure supply of food is necessary to sustain the Chinese economic miracle. It’s also important to help steady prices. Like U.S. shoppers, Chinese consumers are sensitive to inflation, especially when it shows up in the kitchen cabinet.
China needs American food, like America needs Chinese bond buyers. Our mutual appetites will feed each other’s prosperity.