Topic: The continuing decline of China's economy - what are the implications ? (Read 854 times)

It is more correct to say that it was an economy perfectly integrated into the Western market and relations with the global West. The West provided investment, technology, markets, that is, everything that was necessary for the development of the Chinese economy. We should not forget that China's economy is purely export-oriented, which means that it depends on external markets for consumption, as well as on investment and technology, which are the three areas that China itself cannot organize or develop.

As for the fact that “other countries will suffer” is debatable. Let me explain:
Those countries that are caught on the hook of “Chinese investment” will suffer, study the example of Sri Lanka to understand what it is and what problems it creates.
Other countries will not suffer, moreover, it may even be beneficial - to compensate for the reduced supply of goods produced in China, the local market will develop its own production.

China use to have one of the best economy and now things are looking different and if the economy of China is affected then every other things in the global economy will be affected because most of things that are produced from China will be reduced and their will be massive lost when the demand is low and since other people's economy is already affected then they are finding it very hard to increase demand because if their are no people to buy.

And the issue of unemployment is eating up everywhere and with the kind of population that China have they need to put everyone into consideration and that is why even the birth rate was increasing they looked for a solution to actually reduce the way the birth rate is actually increasing because if it continues that were is the job to give to the future ones that are coming.

And the reason why other countries will be affected is that China is one of the biggest countries with the largest economy even when it comes to technology and other things they are leading and they do business with a lot of countries and that is the main reason that it will affect the world economy.

Pretty soon we'll also see a response to the “China is self-sufficient and produces everything internally” narrative
As it turns out the “world's factory” is dependent on so many external suppliers when it comes to real high tech...


The US has ordered Taiwanese company TSMC to stop supplying advanced chips to China from Monday. The chipsin question are those used in AI applications (Reuters).
https://www.reuters.com/technology/us-ordered-tsmc-halt-shipments-china-chips-used-ai-applications-source-says-2024-11-10/
According to the source, the U.S. Department of Commerce sent a letter to TSMC. It says it will impose export restrictions on certain complex chips with a process technology of 7 nanometers or more, intended for China, which are used in artificial intelligence (AI) gas pedals and graphics processing units (GPUs).
The U.S. order, which is being reported for the first time, comes just weeks after TSMC notified the Commerce Department that one of its chips was found in a Huawei AI processor. Research firm Tech Insight reportedly took the product apart, viying the TSMC chip and an apparent export control violation.
Reuters writes that Huawei is on the U.S. trade restriction list, which requires suppliers to obtain licenses for any of the company's goods or technology. As such, any license that could help Huawei's AI efforts will likely be rejected.
According to a Reuters source, as a result of the letter, TSMC has notified affected customers to suspend chip shipments starting Monday. The U.S. Commerce Department declined to comment....

We can long beautifully describe the power of the Chinese economy, but....

According to the results of August, all key indicators of the Chinese economy disappointed investors who expected more positive figures. Fresh data from the National Bureau of Statistics indicate further aggravation of problems.
Industrial production grew by the lowest since March 4.5 percent in annualized terms (in July - 5.1 percent), while experts expected growth of 4.7 percent. The agro-industrial complex and ferrous metallurgy sagged strongly.
Against this background, unemployment rose to the maximum since February this year 5.3 percent (July - 5.2 percent, June - 5 percent). Fixed asset investment growth fell from 3.6 percent to 3.4 percent, with real estate repeating July's result of minus 10.2 percent.
Retail sales showed a result of plus 2.1 percent against July data of 2.7 percent and forecast of 2.6 percent. Thus, the dynamics of the main components that make up the national GDP suggests the possibility of failure to fulfill the growth targets of five percent by the end of the year without additional support measures from the authorities.
Experts do not see any obvious opportunities for China to quickly improve its business. First of all, this is hindered by the ongoing capital outflow, which cannot be slowed down either through promises or regulatory policy. No matter how much the Chinese government tries to make a “pretty face” and draw beautiful indicators, it does not succeed in hiding the reality. It seems to be time to withdraw the rest of your capital from China, as it is possible that your money may be expropriated by China.....

It seems that the Chinese leadership continues to stick to the line of “show numbers in the economy”, as for example was the case with the real estate market where they lent, built, demolished what was built and repeated this cycle to inflate “beautiful” indicators of economic growth... And it seems that now it is a continuation of the same useless game, instead of finding solutions to real problems - among which is the breakdown of relations with Western markets, and inadequate games in the next “great empire” ...

The only thing which starts to change a economic outcome is the American way of hand out to the only group which fires up an economy.
The consumer.

Unfortunately the Chinese similar to other leaderships concentrate on the ones who appear in the reports: Investors.   
The issue in China, as seen from the outside, is the group of people who where promised study hard and get a good well payed job. Something the US screwed up due to their student loans. The countries youth does not wish to eat pain

To answer your question, the increase leads to more debt on State level, no issue.
Should the government panic, Taiwan is their exit to that.

China is trying its last-ditch effort to save the economy... And the methods can hardly be called “saving”, it is more like “postponing the problem”, or postponing the problem to a future period.

“China is considering next week approving the issuance of more than 10 trillion yuan ($1.4 trillion) of additional debt over the next few years to revive its fragile economy, Reuters reports"

https://www.reuters.com/world/china/reaction-reuters-report-chinas-stimulus-plans-2024-10-29/

What do you think - what can the increase in government debt lead to, against the backdrop of huge corporate debt of Chinese companies, and huge debts of Chinese households ?

Market news are as refreshing as always:
China’s $6.5 Trillion Stock Rout Worsens Economic Peril for Xi

    Chinese equities trail global ones for a fourth year running
    CSI 300 Index is near the lowest level since early 2019

The article is from Bloomberg: https://www.bloomberg.com/news/articles/2024-09-10/china-s-6-5-trillion-stock-rout-worsens-economic-peril-for-xi
You wish to read it without paywall, click here:  https://archive.ph/jfoJQ

Chinese statistics are the new meme, apparently Perfect example : official statement - “gold reserves increased by 6.3 billion dollars”. The average person thinks that China bought 6.3 billion dollars in gold reserves. But the reality is as follows: as there were 72.8 million ounces in the reserves, so it remained. The only thing is that the value of the existing reserves has increased from $176.67 billion to $182.98 billion, which exactly corresponds to the increase in the price of gold on the world market in recent months. At the same time, when the price of gold goes down, do you think that the Chinese Ministry of Finance will say that our “gold reserves have fallen”? No, we will never hear that

I think the decline in China's economy will significantly affect the global economy and china's social economy and landscape leading to a major risks in business,market and major areas too.
Imagine the decline in the China economy has caused a high Chance of unemployment in the society and people unable to meet up to standards.This continuous decline is what I don't get because it's becoming so alarming and fustrating and neighbouring countries are being affected by this effects as well but with time I believe they can scale through this a whole lot if they can make some certain adjustment in the economy or need help from neighbouring countries too.

Most are not all. The biggest issue is that we cannot generalize people's behavior.
In regards to The continuing decline of China's economy - what are the implications ?  
It is getting worse. Most leftist and fascism regimes like to hide data. In that tradition China is not falling behind. 
Especially when time looks kinda bad it seems, Those regimes do not see data as a way to create trust, trust is the most important money creator.
 
https://archive.ph/dI8Zz
The original article is here https://www.economist.com/briefing/2024/09/05/the-chinese-authorities-are-concealing-the-state-of-the-economy

 

1. China is a huge manufacturing industry, tou can't argue with that.  But ... you can, for example, read this analysis: https://www.iwkoeln.de/presse/pressemitteilungen/juergen-matthes-simon-gerards-iglesias-china-kann-nicht-ohne-den-westen-1.html

2.  I agree that most people do not know how to manage money ... But whose problem is that ? Banks or stupid people ?

You have to take note that while China is the number 1 exporter in the world, they're also the number 2 importer. While their exports are in trillions, their imports are also in trillions. China actually imports electronics, petroleum, iron ore, and so on. But, overall, the world is more dependent on China than them on the world.


This is the age of neocolonialism. Language and culture don't anymore matter that much. It is not even about conquest anymore. China doesn't have to send its military to control other countries. It is just enough for them to trap other countries with debts. It is enough for China to make other countries subservient to them by simply being their dominant trade partner. China gains control over other countries by simply granting them huge loans to finance their basic services projects and basic infrastructure.

These seemingly friendly and charitable acts of goodwill are enough for China to have other countries by their throat.

I think that a war will just do away with the technological parts of Taiwan. That already would turn tables with the west whose trying to throttle China technologically. 

Another matter is investment, already there come less info out of China as the Economist says:

https://archive.ph/afheC
Originally here it is published: https://www.economist.com/leaders/2024/09/05/bad-information-is-a-grave-threat-to-chinas-economy

Less information, trouble at home is a perfects storm. 

Not everyone depends on imports from China directly though. Yes China depends on exports, but other nations could import from somewhere that is not China, maybe it would be lower quality, maybe it would be higher price, maybe it will take longer on shipping, we really don't know what will happen but we know one thing, which is the fact that it is going to be not China if they just don't want to deal with China. In which case China would have a very hard time selling anything, not their own products, not manufacture for other companies, everything will be hard.

Just imagine Europe and USA puts a huge tariff on anything there, suddenly we will see it is not worth it to get from China and that will cause all companies and people to not pay for that much for Chinese products. It's all political, China has to get along well with west if they want to keep being rich, the moment they do something wrong, like maybe a Taiwan issue, then suddenly all of west will turn on China very easily.

On what western high technology does China depend? Also isn't this a myth anymore that Chinese aren't creatives? Nowadays they invent and create many good things as I have heard.

The majority of the population is not smart, they are lazy also and love easy money, so that's why I agree with the statement that an easy loan is not a good thing.

Other countries that depend on imports (exports from China), what do they produce? I can't understand why I always hear that China depends on export. Almost everything I own is made in China, so what do other countries create that makes China more dependent on them than them on China?

I think that China won't be able to gain control of every country in the world because their culture and language is very different. It was easy and possible for Britain to gain control because their language is still near to our languages. I'm far from Britain but when it comes to grammar, the way we make sentences and etc, there are similarities. I would even say that English is one of the easiest language while Chinese is one of the hardest language. Even if China conquers the whole world, it would require a new generation to make people speak Chinese.

It definitely is a problem but I don't think it is as big a problem as it was made to be in the mainstream media. We have to see though.

It depends on who's trying.
For example US or EU will not be able to do that in a million years. Decades of bad economic decisions and capitalism has mostly killed their production capabilities. This is why a lot of Western companies from Apple to VW can not even exist without China.
If they go against China, they will suffer more themselves.

However, there are other serious competitors capable of doing what China does. For example India. They have the population, the cheap work force, and they have been moving in that direction. Their GDP growth has been big and it is getting closer to be 9% annually. Additionally India is in a way absorbing the capital that is fleeing Europe as Europe continues getting deindustrialized.

Well, there's a good reason why many countries import from China. It's because Chinese companies know how to mass produce things at a bare minimum cost. Chinese governments are friendly to the businesses and their policies are flexible which allows them to produce cheaper. Things are changing but at a very slow pace.

The Chinese economy is at risk due to their real estate sector. Their exports are still strong and in many cases have no competition. If the Chinese economy goes down, they will be able to produce the goods even cheaper because the manpower will become cheaper.

It's not easy to dethrone China from the current position.

That is an excellent point that people always forget when they get lost in the mainstream media nonsense. This becomes more palpable when apart from the size of their imports from China you also check out the trade deficits different countries have with China (that is when what they import from China is more than what they export to China). For example US itself has been facing $300-$400 billion deficit which means US is that much more dependent on China than China is on US.

China is indeed interesting, but not necessarily in the positive sense. Anyway, if China, the third largest country in the world and the most populous in many decades, is so dependent on export, then perhaps other countries are dependent on imports.

But China producing almost everything doesn't mean China produces everything.

China wants to gain control of Taiwan. China wants to gain control of every country in the world. And they use all means necessary to do that. It's a combination of bullying, debt traps, friendly gestures, grants, trade offers, and whatnot.

But the rule has always been that China can't be trusted. I'm not saying the US can be trusted though.