Topic: The continuing decline of China's economy - what are the implications ? - page 3. (Read 854 times)

As we know and observe - in recent years, China's economy has not only experienced “difficult times” but has also gone from growth to decline. The reasons are many - from COVID19, which hit the economy hard, to the changing relationship with the West, resulting in the loss of markets, investment, access to technology and other things that China is heavily dependent on.
Destabilization in China is guaranteed to create a lot of economic difficulties in neighboring countries, as well as on the geopolitical map of the world, where everything is not good.

What happens next ?  I will assume this scenario:

1. Increased withdrawal of Western investment and Western industries from China (related primarily to political conjuncture)
(We are roughly here now)
2. Attempts of the Chinese government to “spare no expense” to keep the economy afloat, which will lead to the burnout of strategic reserves, and will allow to “come to the edge of the abyss”, where without huge Western infusions of money into the Chinese economy the problem will not be solved.
3. strict administrative measures and transfer of the economy under the control of the state, with the curtailment of economic freedoms, which will negatively affect both the efficiency and quality of the economy.

The question is what's next? Realization and acceptance of the problem and correction of mistakes, ceasing to pretend to be the “second pole of the world”, establishment of relations with the West, refusal from dubious “friends”, reintegration into the world economy ? Or ? There may be a path of totalitarianism and isolation, militarization of politics to distract the population from pressing problems and getting the right to total control over people and management of private business ...

Question - what options for the development of events can you assume in connection with this situation?

1. Increased withdrawal of Western investment and Western industries from China (related primarily to political conjuncture)
(We are roughly here now)
2. Attempts of the Chinese government to “spare no expense” to keep the economy afloat, which will lead to the burnout of strategic reserves, and will allow to “come to the edge of the abyss”, where without huge Western infusions of money into the Chinese economy the problem will not be solved.
3. strict administrative measures and transfer of the economy under the control of the state, with the curtailment of economic freedoms, which will negatively affect both the efficiency and quality of the economy.

Everyone is entitled to their own view of a process.
But I have to correct your opinion a bit: at the initial stage, China guaranteed compliance with laws, rights of Western parent companies and investors' requirements, this fact is easy to check. The first “bells” started ringing after the “nationalization” of several high-tech companies. A “good” example would be the story of Cisco and Huawei. Cisco invested billions of dollars in the development of production in China - these are built factories, technologies, jobs. At a certain point, China, under cover of legislation, essentially took away these production facilities and transferred them to Huawei, which is under state control.

I beg to differ. Managers are not owners of a company, they benefit from the short term economical data.

An owner would not give up his development so readily to a country where you have little property protection, intellectual property that is.
The Western Manager Elite Sold out their economies, or made best use of elderly factory designs.

It's hard to believe that they did not know how China is protecting its own. 

It's not greed, it's pragmatism - everyone is trying to reduce the cost of goods and services.

Greed is a good motivator.
It turned out better for the World economy, trading chinese goods make up a huge part in the world's overall economy.

The West made a big mistake when they outsourced their production to China. Now the whole world depends on China. If China does well it is a problem because that means China will be the biggest economy. If China does poorly then it means the rest of the world will suffer from their problems.

The West made a big mistake when they outsourced their production to China. Now the whole world depends on China. If China does well it is a problem because that means China will be the biggest economy. If China does poorly then it means the rest of the world will suffer from their problems.

You know what that means do you?

It means China is running the show now. Not the US.

The West made a big mistake when they outsourced their production to China. Now the whole world depends on China. If China does well it is a problem because that means China will be the biggest economy. If China does poorly then it means the rest of the world will suffer from their problems.

You know what that means do you?

It means China is running the show now. Not the US.

If the Chinese economy falls apart, the next thing that would fall apart is the Western economy specially the US economy that heavily depends on both importing hundreds of billions of dollars of goods from China and also heavily depends on Chinese work force since lots of their production takes place in China.

I read news of China's housing problems and other economic problems but when I look at the economic indicators, it doesn't look that bad. When I look at the indicators I see that it's exaggerated just as the economic problems of the US are exaggerated too. Don't get me wrong, I know there is a problem when you look at the monetary system you know it's a matter of time before something bad happens, but it's always reported as if the countries are crumbling.

Speaking of China, when you look at their GDP over the years you'll see that there is an increase. 2020 saw the lowest growth rate of 2% due to Covid obviously, but 2021 saw an 8% increase and it has been increasing ever since. In 2023 their GDP had a 5% increase. Now, all these considered, these are not bad numbers.
The same can be said about the inflation rate in China. The inflation rate is currently at 2% which is not that bad.
Per Capital income too has been growing (slowly) over the years and if the inflation rate is not too high and per capita income is growing that means people have more purchasing power.
The unemployment rate is at 5.2% as of July. It increased by 0.2% from the beginning of the year.
The Chinese Yuan is also relatively stable. After gaining on the dollar in 2023 to 6.78CHY it dropped to 7.20CHY this year and has maintained that range for a while now.

So yeah, I agree that all may not be well with the economy, but so is the rest of the world, but all things considered, I think they're doing okay.

This is the inevitable outcome of Xi Jinping's way of doing politics. Before he cemented himself into power China was actually opening up and looking much more successful, they embraced the capitalist model albeit with restrictions. Since he has gained power though, lots of prior freedoms have evaporated and he is doing the usual authoritarian warmongering strategy of picking on Taiwan, closing up the economy in the process. He is trying to look strong by being confrontational and controlling, but in reality it scares off outside investment. Sure he is nurturing home grown talent, trying to do things like increasing car manufacturing exports, but this will be meant with claims of subsidization, abuse and blocking in the most profitable markets - because ultimately the CCP owns every company, it's a valid complaint.

China's growth of 5.2% in 2023 exceeded the previous year's 3.0% but is still considered lagging by historical standards(9%)

1. Increased withdrawal of Western investment and Western industries from China (related primarily to political conjuncture)

As we know and observe - in recent years, China's economy has not only experienced “difficult times” but has also gone from growth to decline. The reasons are many - from COVID19, which hit the economy hard, to the changing relationship with the West, resulting in the loss of markets, investment, access to technology and other things that China is heavily dependent on.
Destabilization in China is guaranteed to create a lot of economic difficulties in neighboring countries, as well as on the geopolitical map of the world, where everything is not good.

What happens next ?  I will assume this scenario:

1. Increased withdrawal of Western investment and Western industries from China (related primarily to political conjuncture)
(We are roughly here now)
2. Attempts of the Chinese government to “spare no expense” to keep the economy afloat, which will lead to the burnout of strategic reserves, and will allow to “come to the edge of the abyss”, where without huge Western infusions of money into the Chinese economy the problem will not be solved.
3. strict administrative measures and transfer of the economy under the control of the state, with the curtailment of economic freedoms, which will negatively affect both the efficiency and quality of the economy.

The question is what's next? Realization and acceptance of the problem and correction of mistakes, ceasing to pretend to be the “second pole of the world”, establishment of relations with the West, refusal from dubious “friends”, reintegration into the world economy ? Or ? There may be a path of totalitarianism and isolation, militarization of politics to distract the population from pressing problems and getting the right to total control over people and management of private business ...

Question - what options for the development of events can you assume in connection with this situation?