Topic: The continuing decline of China's economy - what are the implications ? - page 5. (Read 1321 times)

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.

In order to limit the discussion of delusional theories, please, to youbpooya87 , bring here the following, ARGUMENTED, and verifiable data:
1. the balance of import exports between the US-China (this will show whose economy is more dependent on whom)
2. indicate the balance of investment of the countries in each other
3. show where China will be able to supply its goods if it loses the western market, while maintaining high added value of goods (hint - the wallets of US consumers are much thicker than those of African consumers, for example).

and we will come back to reality and see if your fantasy has a place in reality

China was en route to become the #1 economy, surpassing the USA. Thankfully, that didn't happen and is now unlikely to happen. Honestly, I think the West is not being harsh enough with China, considering how China is behaving. The human rights situation there is terrible, especially when it comes to Uyghurs. Moreover, China is increasingly helping Russia out both softening the impact of Western sanctions and providing support for Russia's war against Ukraine. Considering that, unfortunately I believe that China is looking for further polarization and team-up of the world's worst countries that will help each other out and try to challenge the West.

The problem is that, like any totalitarian or semi-totalitarian state (government), China publishes only “correct” statistics, which will “shout” that ALL IS GOOD. Therefore, relying on China's official data is not a good way to really assess the situation. At the same time, there are a lot of secondary indicators that speak about systemic problems of the economy. 
Many people, for example, without understanding the situation and the role of China in the world economy, mistakenly consider it one of the foundations of the modern world economy. On the surface, it may look like this. But in reality, China's economy is dependent on the West, for example, consumer markets, technology, investment, and much more. As we all know by now, the Chinese government's attempt to impose its desires on the West has ended with investors leaving China at a rapid rate, production leaving, foreign exchange earnings shrinking, jobs shrinking, and access to scientific data and high quality Western education shrinking. Yes, I agree, the SIGNIFICANT negative manifestations in China's economy will not appear tomorrow, it is a matter of 3-5 years. But ... the process has already started, Xi Jinping-on has started, and he as the initiator of this problem, while he does not make steps to solve it, he only complicates the situation. Complicates the situation for China. China's unjustifiably inflated self-assessment of its influence on the world economy has played a bad trick on it ...

his threats against Taiwan certainly caused the USA to build chip plants in the USA
https://www.cnn.com/2024/04/08/tech/tsmc-arizona-chip-factory-investment/index.html
Biden to give Taiwan’s TSMC $6.6 billion to ramp up US chip production

intel and texas instruments to also build in the usa

from tom's hardware U.S. Semiconductor Renaissance: All the Upcoming Fabs
from Reuters:


Intel's $20 bln Ohio factory could become world's largest chip plant.


all because a moron in China seized power and broke the 8 year serve as leader tradition after which he threatened Taiwan.

So he single handedly fucked his whole country.

even a "decline" is still 3-5% growth

I see that as a direct indication for war preparation.
It is kind of an insurance for the relation USA -China.

If China's economy continues to decline global implications could be significant. It could lead to reduced demand for imports which would really affect trade partners & global supply chains. A slowdown could also impact commodity prices because China is a major consumer. Increased unemployment & social unrest within China might arise potentially leading to political instability. Financial markets could react negatively which would result in decreased investor confidence. A declining Chinese economy could disrupt global economic growth, shift geopolitical dynamics & necessitate adaptations in international trade relationships.

This type of thing happens to every nation, it is not really specific to China so there is nothing to worry about, it is not unexpected. If people assume that every nation could just grow without a limit and keep on growing forever then they have never studied history before, whereas in reality we are talking about something much more realistic because every nation drops.

They just need to make sure that they are not working for others, but working for themselves and push that more. They built their own car, their own phones, their own social media, basically everything of their own, and they just need to keep that going as much as possible. If they can continue to do that then they will not have any issues, because they will make much more money from that.

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.

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.

On top of that we all know that China is one of the biggest bag-holders of the US debt. In case of any kind of economic hardship in China, they'll start liquidating those bonds to get money to help their economy. That dump would burn the US economy to the ground.

But is the Chinese economy in decline? I don't think so. Their growth might have slowed down due to COVID and the follow up conflicts in the world but Chinese economy unlike a lot of other economies is the healthiest because it depends on production (as opposed to US economy which is a debt based economy with production mostly dead). That is why it is still growing rapidly.

Most of China's neighbors don't rely on China as much as you'd think. India for example is in competition with China, "destabilization" would help them. Others like Afghanistan are too ruined to be affected by anything. Others like Tajikistan, Kyrgyzstan, Kazakhstan, etc. don't really depend on China as much to be affected significantly.
That leaves Russia, which could potentially benefit significantly since it would tip the balance (of who depends on whom) in favor of Russia.

A lot of countries including US have been doing this over the past couple of years. Need I remind you how many of these companies US regime took to court? The biggest one was BlackRock. Wasn't that "curtailment of economic freedoms negatively affecting both the efficiency and quality of the economy" or is it just negative when China does it? LOL
I ask this because each time I've said the same exact things about Western economies you disagree and justify them and yet you use the same argument you rejected about 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.

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?