The continuing decline of China's economy - what are the implications ?

[batang_bitcoin]

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.

[davis196]

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.

[Casdinyard]

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.

[DrBeer]

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.

[WillyAp]

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.

[Darker45]

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.

[DrBeer]

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.

[Darker45]

~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.

[DrBeer]

~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....

[justdimin]

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.

[WillyAp]

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.

[DrBeer]

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

[Yatsan]

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.

[Apocollapse]

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.

Because China is greater than The West, period.

China has full of hard worker and they push their limit, unlike Western countries that always looking for slow living aka work life balance, China don't have it because they adopt 996 working hour system.

As a country China is great, but as a worker The West is better.

[mindrust]

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.

Because China is greater than The West, period.

China has full of hard worker and they push their limit, unlike Western countries that always looking for slow living aka work life balance, China don't have it because they adopt 996 working hour system.

As a country China is great, but as a worker The West is better.

China wasn’t so great 20 years ago and they didn’t become so great by on their own. The US helped them. I still find it weird. It was a profitable move for the short term but as everybody can see it now, it was a disastrous move for the long game.

The West I know aren’t really the short term players so this move contradicts with their history. Only the weak countries try to save their tomorrow by giving up on their distant future.

There are a few possibilities in this situation.

1- The west became dumb and weak
2- The traitors are in command
3- Both above are true as the traitors wouldn’t get in command if the society was smart and strong.

[DrBeer]

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.

Because China is greater than The West, period.

China has full of hard worker and they push their limit, unlike Western countries that always looking for slow living aka work life balance, China don't have it because they adopt 996 working hour system.

As a country China is great, but as a worker The West is better.

China wasn’t so great 20 years ago and they didn’t become so great by on their own. The US helped them. I still find it weird. It was a profitable move for the short term but as everybody can see it now, it was a disastrous move for the long game.

The West I know aren’t really the short term players so this move contradicts with their history. Only the weak countries try to save their tomorrow by giving up on their distant future.

There are a few possibilities in this situation.

1- The west became dumb and weak
2- The traitors are in command
3- Both above are true as the traitors wouldn’t get in command if the society was smart and strong.

It is most likely a set of problems that gave this “result”.
It is also a “soft policy” with avoidance of tough measures towards violators of agreements and accepted rules of the game. And it started during the Obama era, when Washington decided to play “soft and fluffy”..... Unfortunately, mistakes in the past are paid for in the future.

[mindrust]

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.

Because China is greater than The West, period.

China has full of hard worker and they push their limit, unlike Western countries that always looking for slow living aka work life balance, China don't have it because they adopt 996 working hour system.

As a country China is great, but as a worker The West is better.

China wasn’t so great 20 years ago and they didn’t become so great by on their own. The US helped them. I still find it weird. It was a profitable move for the short term but as everybody can see it now, it was a disastrous move for the long game.

The West I know aren’t really the short term players so this move contradicts with their history. Only the weak countries try to save their tomorrow by giving up on their distant future.

There are a few possibilities in this situation.

1- The west became dumb and weak
2- The traitors are in command
3- Both above are true as the traitors wouldn’t get in command if the society was smart and strong.

It is most likely a set of problems that gave this “result”.
It is also a “soft policy” with avoidance of tough measures towards violators of agreements and accepted rules of the game. And it started during the Obama era, when Washington decided to play “soft and fluffy”..... Unfortunately, mistakes in the past are paid for in the future.

I think you are onto something here when you mentioned the democrats & Obamala because this is the exact traitorous soft policy on China what Trump is trying to abandon.

[beerlover]

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.

The idea of making stuff seems like the next stage because they realized the ydo not have to rely to anyone that way. If they continue with their old system and just made stuff for others then it wouldn't be good for them since it would mean the moment they take their manufacturing to another nation then China would collapse, and we are seeing the pains of that right now, because that already happened with some companies and that's why China did this.

These are a ll growing pains and I believe that we are going to see China be strong again. Remember, this is a nation that doesn't care about their citizens as much as they care about their national power, they would sacrifice people in sweatshops which they already did, they had to literally put suicide nets to their own factories, but that made them richer. When you say China is rich, do not think it's the normal people, many of the normal people are dirt poor and hungry, it's the party that is rich.

[pooya87]

In Germany I went into a bank and received a small credit based on my idea.

Being able to got under debt so easily is not as good a sign as you may think. It just shows that your economy is heading in a very dangerous path of becoming a debt-based economy which only has one eventual result: collapse as the debt piles on.

Not to mention that debt-based economy is a lot worse for Germany than it is for US because the US regime could successfully run a Ponzi scheme and export its inflation postponing the collapse, Germany cannot do any of that.

[icalical]

China’s economic future could go a few different ways. One option is that China adapts by focusing more on domestic innovation and technology, and building stronger trade relationships with other countries. This could help China find new areas of growth and keep developing, though possibly more slowly.

Another possibility is that China makes policy changes to fix current problems, like improving the business environment and attracting more foreign investment. There’s also the chance that China could increase government control over the economy, which might offer short-term stability but could affect long-term efficiency. Lastly, China might seek new trade partners and alliances outside the West to reduce reliance on Western markets and find new economic opportunities.