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Topic: The continuing decline of China's economy - what are the implications ? - page 4. (Read 1321 times)

legendary
Activity: 2576
Merit: 1252
Leading Crypto Sports Betting & Casino Platform
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?



Its only based on what I know and did some readings in articles too. The future of China's economic and geopolitical position is likely to turn into many potential directions depending on today's factors. For example, China could work on economic reforms, improve its relations with the West, and integrate itself again in the global economy by way of addressing the prevailing issues and making technological investments. Also, it might increase state control over the economy, limit economic liberalization, and focus inward; a strong structure of authoritarianism can be established while cooperation with the West markets is reduced. Again, China may try to strengthen its geopolitical strategies by reforming military or foreign policy so that all attention can be diverted from the domestic problems to this aspect while it maintains its global influence. Finally, long-term economic crises can increase volatility and domestic discontent that can lead to higher political and social instability.
legendary
Activity: 3752
Merit: 1864
I can dispute this statement as I believe it to be erroneous.  The fact is that although China is the World Factory of Everything, most of the goods produced by China are not CRITICAL goods. 90% of Chinese goods can either be discarded or replaced by financing and supporting local producers.
Can you list - what goods/technologies/services does China produce that are unique to the world economy and cannot be produced by other countries ? I see so far only options with rare earth metals and battery production.
Technically speaking they are moving away from that and it is a good thing for the world. So, it would be wrong to say that China makes everything, there are still some things that China does, like some car companies have China as their distribution centre for Asia, and apple uses them and many other stuff like sneakers etc etc.

However, I would like to point out that even that's not true anymore and everyone is looking for other places, the reason is that China wants their own products and they do not want to make America's products and give it back to them, they want to build their own products and sell those. That has been the case for a very long time, like look at how cheap their EV cars right now, they are not competing with Tesla, they never wanted to, what they want is to make sure that all the bikes and cars that are electric were their own products that they sell to billions of people in their own country and in India and everywhere around, even going as west as some European nations which are not rich.

A very subtle observation and nuance. Indeed - “contract manufacturing” is good, but not very effective. The added value there is not very large, against the background of its own full-fledged production.  But for others - it will not be profitable, and therefore Western companies are looking for other territories where it is possible to produce the necessary goods with a low markup, and a comfortable price for the customer.
If we return to cheap cars from China, their low price is also due to large state subsidies, i.e. artificial price reduction for higher competition. This is why barrier duties are imposed on Chinese cars, which make Chinese cars less competitive
member
Activity: 910
Merit: 31
Looking for guilt best look first into a mirror


Yeah, unfortunately, it's China that's indeed running the show now. And it's not hard to prove this. We only have to realize that everything is made, produced, assembled, manufactured in China from paper clips and erasers to the very materials that made the building in which we live. T

That is not true.
About 40% of the products are made in China, in some countries it might be more. Most goods are made under western development.
And if left alone China would be bankrupt, If your country purely relies on exports, you do not have a sustainable economy. You have a dependent one.
Furthermore China lacks a Word Currency plus the mechanism  to send it around.

Most of the world runs on an antique banking system. The 1st World is a little more advanced in banking.
 
How hard is it in your country to open a bank account? To get a credit approved?
In Germany I went into a bank and received a small credit based on my idea.
To do the same in the country I choose to live in, it's about 6 weeks and a lot of paperwork.

That means you can't even get seed money from the local bank.
hero member
Activity: 3220
Merit: 678
www.Crypto.Games: Multiple coins, multiple games
I can dispute this statement as I believe it to be erroneous.  The fact is that although China is the World Factory of Everything, most of the goods produced by China are not CRITICAL goods. 90% of Chinese goods can either be discarded or replaced by financing and supporting local producers.
Can you list - what goods/technologies/services does China produce that are unique to the world economy and cannot be produced by other countries ? I see so far only options with rare earth metals and battery production.
Technically speaking they are moving away from that and it is a good thing for the world. So, it would be wrong to say that China makes everything, there are still some things that China does, like some car companies have China as their distribution centre for Asia, and apple uses them and many other stuff like sneakers etc etc.

However, I would like to point out that even that's not true anymore and everyone is looking for other places, the reason is that China wants their own products and they do not want to make America's products and give it back to them, they want to build their own products and sell those. That has been the case for a very long time, like look at how cheap their EV cars right now, they are not competing with Tesla, they never wanted to, what they want is to make sure that all the bikes and cars that are electric were their own products that they sell to billions of people in their own country and in India and everywhere around, even going as west as some European nations which are not rich.
legendary
Activity: 3752
Merit: 1864
~snip~

Yeah, unfortunately, it's China that's indeed running the show now. And it's not hard to prove this. We only have to realize that everything is made, produced, assembled, manufactured in China from paper clips and erasers to the very materials that made the building in which we live. The world is dependent on China today so much so that if China stops making products, the world might go back to its primitive days. I, of course, am exaggerating but everybody knows the point.

I can dispute this statement as I believe it to be erroneous.  The fact is that although China is the World Factory of Everything, most of the goods produced by China are not CRITICAL goods. 90% of Chinese goods can either be discarded or replaced by financing and supporting local producers.
Can you list - what goods/technologies/services does China produce that are unique to the world economy and cannot be produced by other countries ? I see so far only options with rare earth metals and battery production.

Everything that's made in China could be replaced by local production. That's true. But how probable is this thing to happen? Great efforts have been made by the US to try to bring back companies to the fold. They only achieved limited success, if indeed you can call it as such.

The truth is that no other country can replicate China. It is only the Chinese government that has hundreds of millions of slaves at their absolute disposal. Therefore, it is the only country that can mass produce anything at lightning speed. Perhaps our only chance is for this massive body of human automatons to finally wake up. It is slowly happening. They're beginning to make demands. China will cause its own demise.

Anyway, my iPhone is made in China, so is my laptop. The rest of the appliances at home, from rice cooker to electric iron to the television to the stove and others are also made in China. The materials that made the house itself like cement and steel are also produced by China. Hell, even our vegetables, fish, and even as basic as rice are imported from China. So, that's basically my entire existence. That's how critical our dependence on China is. I hope this isn't your situation.

It's not a “one day” process. The U.S. has already started the process of returning some production facilities to the U.S. territory. Some production is already migrating to other countries.

Why doesn't everyone move production? First of all, not all of them had it, and there are many countries with economies that are not full cycle, and they have historically imported many goods. For such countries the supplier of imported goods will simply change.
Others are still watching the situation, hoping that China will choose a more adequate domestic and foreign policy, and there will be no need to move anywhere. But for such observers, I have bad news - today's Chinese government will not change its vector, because the economic situation in China is very bad, and it can be solved either by returning the economy to self-regulation, without state management and pressure, or by going to totalitarian rule with degradation of the economy to a minimum level, and the eternal “search for enemies” to explain why the situation is so bad. In my opinion, the Chinese government has chosen the second way, which means further deterioration of China's economy and a breakdown of relations with the developed world....
legendary
Activity: 2576
Merit: 1860
~snip~

Yeah, unfortunately, it's China that's indeed running the show now. And it's not hard to prove this. We only have to realize that everything is made, produced, assembled, manufactured in China from paper clips and erasers to the very materials that made the building in which we live. The world is dependent on China today so much so that if China stops making products, the world might go back to its primitive days. I, of course, am exaggerating but everybody knows the point.

I can dispute this statement as I believe it to be erroneous.  The fact is that although China is the World Factory of Everything, most of the goods produced by China are not CRITICAL goods. 90% of Chinese goods can either be discarded or replaced by financing and supporting local producers.
Can you list - what goods/technologies/services does China produce that are unique to the world economy and cannot be produced by other countries ? I see so far only options with rare earth metals and battery production.

Everything that's made in China could be replaced by local production. That's true. But how probable is this thing to happen? Great efforts have been made by the US to try to bring back companies to the fold. They only achieved limited success, if indeed you can call it as such.

The truth is that no other country can replicate China. It is only the Chinese government that has hundreds of millions of slaves at their absolute disposal. Therefore, it is the only country that can mass produce anything at lightning speed. Perhaps our only chance is for this massive body of human automatons to finally wake up. It is slowly happening. They're beginning to make demands. China will cause its own demise.

Anyway, my iPhone is made in China, so is my laptop. The rest of the appliances at home, from rice cooker to electric iron to the television to the stove and others are also made in China. The materials that made the house itself like cement and steel are also produced by China. Hell, even our vegetables, fish, and even as basic as rice are imported from China. So, that's basically my entire existence. That's how critical our dependence on China is. I hope this isn't your situation.
legendary
Activity: 3752
Merit: 1864
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.

Yeah, unfortunately, it's China that's indeed running the show now. And it's not hard to prove this. We only have to realize that everything is made, produced, assembled, manufactured in China from paper clips and erasers to the very materials that made the building in which we live. The world is dependent on China today so much so that if China stops making products, the world might go back to its primitive days. I, of course, am exaggerating but everybody knows the point.

I can dispute this statement as I believe it to be erroneous.  The fact is that although China is the World Factory of Everything, most of the goods produced by China are not CRITICAL goods. 90% of Chinese goods can either be discarded or replaced by financing and supporting local producers.
Can you list - what goods/technologies/services does China produce that are unique to the world economy and cannot be produced by other countries ? I see so far only options with rare earth metals and battery production.
legendary
Activity: 2576
Merit: 1860
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.

Yeah, unfortunately, it's China that's indeed running the show now. And it's not hard to prove this. We only have to realize that everything is made, produced, assembled, manufactured in China from paper clips and erasers to the very materials that made the building in which we live. The world is dependent on China today so much so that if China stops making products, the world might go back to its primitive days. I, of course, am exaggerating but everybody knows the point.
member
Activity: 910
Merit: 31
Looking for guilt best look first into a mirror

That you cannot trust a communist is not that new.
Those tricks are not new either. There have even been warnings. Greed is what made Manager close their eyes and open their pockets.
Managers are paid for performance they are hardly ever punished.
What do you believe is just not mentioned, the grey zone, where CEO got told and said nothing, just to save face.  
Quote one should explain it.

Cisco didn't have a collapse, Cisco's sites, equipment and technology were simply seized in favor of the state. And I have my doubts that the directors of Cisco had information about such a move by the Chinese government. In fact, the government on the day when the “license to operate in China” was to be renewed, they were simply refused.

You have to calculate that they do not play fair before you launch into an adventure.
They launched basically knowing what was to be expected.
legendary
Activity: 3752
Merit: 1864

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 agree on the entitlement of opinion, each it's own.

That you cannot trust a communist is not that new.
Those tricks are not new either. There have even been warnings. Greed is what made Manager close their eyes and open their pockets.
Managers are paid for performance they are hardly ever punished.

What do you believe is just not mentioned, the grey zone, where CEO got told and said nothing, just to save face.  

Do you know anyone who was punished for selling out from the cisco debacle?

Cisco didn't have a collapse, Cisco's sites, equipment and technology were simply seized in favor of the state. And I have my doubts that the directors of Cisco had information about such a move by the Chinese government. In fact, the government on the day when the “license to operate in China” was to be renewed, they were simply refused. And this case, as far as I know, was not taken into account in the contract as a situation when Cisco has the right to take and remove its equipment, because the contract provided for auto prolongation under the assurances of the Chinese government.  So this is a classic Sharikov* idea - “take from the capitalists and divide”.

Sharikov is the hero of Bulgakov's book “Dog's Heart”.
By the way - I highly recommend reading Bulgakov's book “Dog's Heart”, it perfectly describes the revolutionary changes and the coming to power of the lumpenized society. There is also a very good adaptation = movie, filmed during the collapse of the USSR (the country built by such Sharikovs) in 1988, perhaps there is a quality translation into your native language.
hero member
Activity: 2184
Merit: 891
Leading Crypto Sports Betting and Casino Platform
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?


One consequence of a dying economy, and this has happened in the past with other state-nations as well, is the pursuit of other territories to exploit their natural resources and manpower for themselves, we're seeing this happen with China as they try to exert what little force they have against smaller countries like the Philippines, with the dispute between the West Philippine Sea as well as other oil reservoirs within the area being a large focal point of this issue, they also are trying to exert their force against countries which they don't even have business trying to invade in at the very least, like Indonesia and Malaysia for example.

So yeah, they're desperately trying to annex territories, but as long as efforts are being made to stave them off, they'll continue to bleed money and lose traction until they finally give out, by then, either a whimpering death or a massive nuclear war would commence, and we can only guess as to what would happen next.
hero member
Activity: 3192
Merit: 939
Quote
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.

I wouldn't call a 5.2 percent annual GDP growth(2023) a "decline". The level of 5-10% annual GDP growth might become a thing from the past for China, but the Chinese economy will keep growing with levels below 5% per year. The main reason is there is still lots of room for growth. China has over 1 billion people, that are living with a relatively low salaries. The Chinese economy will become less and less dependent on export and more focused on growing the domestic consumption. The housing bubble and big provincial debts are major problems, but they can be solved. I agree that the Communist Party is heading towards increased government control and less freedom for the business. This is a huge mistake, which might lead to a future decline.
hero member
Activity: 3080
Merit: 603
If there was no court order for Evergrande to be liquidated, they won't do it and will do the same thing as what US does and that's to hide that they are having a declining economy. OP has the right assumption of what's next. IIRC, China has acquired a lot of shares from the US and UK during the pandemic period. They've invested heavily on those stocks as they think it was the right time to do it. It won't be surprising if they start to dump all of those stocks and shares to pump their economy while obviously going to have that declining moment for the said two giants.
member
Activity: 910
Merit: 31
Looking for guilt best look first into a mirror

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 agree on the entitlement of opinion, each it's own.

That you cannot trust a communist is not that new.
Those tricks are not new either. There have even been warnings. Greed is what made Manager close their eyes and open their pockets.
Managers are paid for performance they are hardly ever punished.

What do you believe is just not mentioned, the grey zone, where CEO got told and said nothing, just to save face.  

Do you know anyone who was punished for selling out from the cisco debacle?

 
legendary
Activity: 3752
Merit: 1864

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

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 assume that the Chinese leadership realized perfectly well that telecommunications in the 21st century is one of the pillars of the digital economy, and decided to “gently” expropriate other people's assets. This was, in fact, China's first step to violate its commitments and the first example of breach of contract.

If we go back to Western companies, the main driver of the process of transferring production to China was tax optimization, which is also a normal and common process. This is what many people do. Now the U.S. is returning high-tech production to its territory, because it has become logical - China is violating treaties and agreed rules of the game, plus it is imposing restrictions on technology supplies to China, plus it is good for the U.S. economy - jobs and taxes
member
Activity: 910
Merit: 31
Looking for guilt best look first into a mirror

It's not greed, it's pragmatism - everyone is trying to reduce the cost of goods and services.
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. 
legendary
Activity: 3752
Merit: 1864
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.

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.

It's not greed, it's pragmatism - everyone is trying to reduce the cost of goods and services. And one of the ways is to move production to countries with lower taxes or tax exemptions and/or to countries where the necessary personnel is available, but the level of wages in the country is noticeably lower.
Otherwise we will have to consider any of our steps to find the same product or service at a lower price as greed and avarice, although, in fact, this is an absolutely normal process Smiley

And there is always a way out - the world is not homogeneous and there are countries that can offer the same conditions that China was able to offer to Western companies and investors almost 40 years ago. I recommend you to pay attention to India, as a global substitute for China, as well as countries like Vietnam - which choose the Western vector and integration with the world economy.

Another question is what will happen to China's economy, which will lose its market and solvent population? Yes, China is now colonizing the African continent, but let's be honest - there is no large layer of consumers with European or American incomes, which means they can not buy high quality goods with high added value. And this means that China's production will again shift to the production of cheap, low quality goods, and as a consequence the economy's income will shrink dramatically... I'm sure you understand how economics works, and you understand where this is going.
member
Activity: 910
Merit: 31
Looking for guilt best look first into a mirror
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.

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.
hero member
Activity: 2632
Merit: 787
Jack of all trades 💯
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.

Labor cost in China is so cheap and they have lots of people who can work in manufacturing firm that's why the west pass the production on big manufacturing firms in that country. Its just to bad that for continuous doing those decisions they didn't notice that everyone will get affected if there's economic problems will happen to China. But since India and other asian countries became good destination to other manufacturing firms then I think the world could able to cope up with those losses they made if China will totally collapsed since they have other alternative countries where they can insert those businesses and make everything goes alive again.

For now this is the one makes China became more stronger but there are lots of rumors that this country is struggling. Although we can't verify the real situation since Chinese government is so evasive when discussing about the real situation happened in their country.
legendary
Activity: 3752
Merit: 1864
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.

Unfortunately the west is inherently wrong, because they treat all others as adequate and honest partners. China is not the only example. But, uh. the West is working on mistakes, and doing “corrective work”. China has become a “global factory”, but it is still dependent on Western technology, money, markets. Now the West has started a systematic process of migration of production to neighboring countries (India looks like a potential leader here), the West is withdrawing investments, the West is restricting access to technology and science. And as you can see, even at the initial stage, the Chinese government is already starting to beg for “good relations”, because they live not by propaganda but by reality, and they understand perfectly well what this threatens China.

The only question is whether China will be smart enough and honorable enough to admit its mistakes and return to the civilized world, or it will become another rogue/aggressor country.
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