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

[DrBeer]

But there is a nuance - without guaranteeing the salvation of the Chinese collapsing economy, this step is guaranteed to hit the economy of the unfortunate “Chinese obedient slaves”, who have formed their gold reserves not in normal currencies (dollar/euro) but in yuan! I wonder how they will react if their state reserves fall overnight by 10-20% ?

They'll weight its pro and contras.
Do those countries have a credit running with China or what made them exchange their Gold into Yuan?
Most countries being overly adventurous with the Chinese or the US for that matter, learn pretty fast.

Well, who made them exchange their gold and dollars for yuan ? I will assume, and I will describe it in non-economic terms - most likely their own idiocy. Let's take for example China's raw materials appendage - Russia, it is the best example, where all these manifestations are clearly expressed.
So, for several years, Russia, developing the hysteria “let's destroy the dollar”, and in fact, having just spent huge amounts of money on the war, and not receiving dollars from the previously usual channels (oil and gas sales), decided to present this problem as “a step in the fight against the hated dollar”. And began to sell most of the resources for yuan (China is the largest buyer of Russian oil and gas). Since Russia's access to the dollar has been severely restricted in recent years, they are forced to enjoy what they can get from their essentially “master” China. None of russia's “friends” pay russia in dollars. Anything - yuan, rupiahs, reals, dongs, .... but NOT DOLLARS !

I don't know what challenges China's economy is facing and how bad their economic situation is because I'm not Chinese. But as far as I know, in just 10 short years, their GDP has increased from 7 trillion to 17 trillion. They have become the 2nd largest economy in the world and account for 86% of Asia's economic output. I wonder if any country has achieved such remarkable growth in the past decade.

Yes, they may be facing certain difficulties and have not overcome them yet, but that is not too worrying because that is the general situation of the world after the covid pandemic. There is nothing to worry about when the economy slows down slightly after 10 years of continuous growth.

All events have a cause and effect. So if we talk about the development of China's economy, then:
- cause: investment, technology, and the building of industrial production in China by Western investors/companies
- consequence: the strongest impetus for the development of the economy thanks to Western investors, technology. And what you have stated is a fact, though with nuances....
Now let's get back to the nuances. In recent years, when the situation in China began to show a slowdown in economic development, which was not acceptable to the “party statistics”, the Chinese government began to pour huge amounts of money into the construction of “air castles”. The indicators were “beautiful”, but nothing but the growth of hidden huge loans, and assets that have no real value, in reality did not work out. The first to collapse was the real estate market with a “hole” of hundreds of billions of dollars. But this is the tip of the iceberg..... The collapse of the real estate market will be followed by other sectors of the economy. Next, I do not exclude the problem in the car manufacturing market, where the state also injects huge funds to subsidize production.

The Chinese economy is EXPORTORIENTED, and now China is losing good export markets (EU, USA, other countries of the “global west”), and is trying to “occupy” the markets of the third world, but this will not compensate for the loss of the western market. And stoppage of production (due to overproduction, due to loss of large markets for exports) leads to more internal problems - higher unemployment, lower incomes, lower taxes,....

[moderator's note: consecutive posts merged]

[danadc]

In 2019-2020 the war was already underway. Today's war in Europe was started by russia in 2014.... Whether the virus leak was intentional or not - it is false to say now, but if it was intentional - the goal was achieved - a huge blow to major economies and developed countries, where states had to make very difficult decisions, “printing money” to provide social assistance, as well as assistance to private business... With some probability, all this can be regarded as links of one chain - weakening of the world economy (19-20 years), reorientation of many countries (first of all developed, western countries) on internal problems, at this moment (20-21 years) starts harsh rhetoric from the side of russia (this “guinea pig” of china), which reveled in impunity for the war started in 2014, “the west - we order you to do what we say”, the next step was to be the full occupation of Ukraine, the withdrawal of Russian troops to the EU borders with further threats, provided the continuation of soft or cowardly policy of the west. Then should have been the takeover of Taiwan, with the complete impotence of the western world, which they have shown until 2022.... But Ukraine has become a “bone” that is stuck “in Russia's throat” and is leading to its collapse, as well as the growing problems of China, because of the impossibility to realize its plans.

Tines was right, but now with the problem of Russia and Ukraine, if they do not intervene quickly, the third war will develop, sometimes I see some news and I say that it is already imminent, I hope that Donald Trump can come in and avoid this conflict, at the same time I would also like the BRICS to develop in their totality, to see what happens with the global economies, China is a fact that has a good economy, but for me there is a lot of black hand in all this, the covid thing, so many things that have come out, there is talk of a new pandemic that will come out of Italy, so all this is going to produce a lot of controversy.

[WillyAp]

I hope that Donald Trump can come in and avoid this conflict, at the same time I would also like the BRICS to develop in their totality, to see what happens with the global economies, China is a fact that has a good economy, but for me there is a lot of black hand in all this, the covid thing, so many things that have come out, there is talk of a new pandemic that will come out of Italy, so all this is going to produce a lot of controversy.

I fear your hope into a politician's action won't work out. Similar with BRICS.
The issue lies in how a state plans the outcome, in case of Russia it's clear that a ww3 is likely.

[DrBeer]

In 2019-2020 the war was already underway. Today's war in Europe was started by russia in 2014.... Whether the virus leak was intentional or not - it is false to say now, but if it was intentional - the goal was achieved - a huge blow to major economies and developed countries, where states had to make very difficult decisions, “printing money” to provide social assistance, as well as assistance to private business... With some probability, all this can be regarded as links of one chain - weakening of the world economy (19-20 years), reorientation of many countries (first of all developed, western countries) on internal problems, at this moment (20-21 years) starts harsh rhetoric from the side of russia (this “guinea pig” of china), which reveled in impunity for the war started in 2014, “the west - we order you to do what we say”, the next step was to be the full occupation of Ukraine, the withdrawal of Russian troops to the EU borders with further threats, provided the continuation of soft or cowardly policy of the west. Then should have been the takeover of Taiwan, with the complete impotence of the western world, which they have shown until 2022.... But Ukraine has become a “bone” that is stuck “in Russia's throat” and is leading to its collapse, as well as the growing problems of China, because of the impossibility to realize its plans.

Tines was right, but now with the problem of Russia and Ukraine, if they do not intervene quickly, the third war will develop, sometimes I see some news and I say that it is already imminent, I hope that Donald Trump can come in and avoid this conflict, at the same time I would also like the BRICS to develop in their totality, to see what happens with the global economies, China is a fact that has a good economy, but for me there is a lot of black hand in all this, the covid thing, so many things that have come out, there is talk of a new pandemic that will come out of Italy, so all this is going to produce a lot of controversy.

You are in vain to hope that if you do not interfere in the terrorist war unleashed by Russia in Ukraine, the third world war will not come. As az if we don't stop russian aggression now - WW3 will be guaranteed. BUT ! The world will get it already in EU and other countries, about destruction of which the decision of rashism declares for a long time ! I have already cited the best association many times: Rashism is a cancerous disease of our world. Tell me what are the options for the treatment of cancer diseases, fatal, for the whole organism?
1. Wait and do not touch it will pass by itself.
2. Drink tea and compresses from oak leaves, so as not to provoke the disease. It will pass on its own and total metastasis will not give.
3. rigid chemotherapy and other active therapy aimed at destroying cancer cells and cleansing the body of traces of intoxication ?

Would you really choose 1 and 2, if anything ?

[Swordsoffreedom]

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According to some forecasts, China's GDP will average 4.8% in 2024 while their target is 5% growth. This means that the Chinese economy is still growing despite the difficulties it is facing. From this result we can see that their economy is quite stable and not as bad as what you are saying about them. Even though the GDP was not as expected, it at least showed that their economy continued to grow year on year, unlike the countries in the eurozone or many others that are still struggling with inflation and negative growth.

The fact is they are still the second largest economy in the world and their GDP continues to grow every year and will soon catch up with the US economy if the US does not find a solution to contain them   .


https://www.statista.com/statistics/1102691/china-estimated-coronavirus-covid-19-impact-on-gdp-growth/

[Haunebu]

China's economy seems alright at the moment considering everything, but it will probably experience decline soon thanks to Trump's trade tariffs when he assumes office early next year.

The fact is they are still the second largest economy in the world and their GDP continues to grow every year and will soon catch up with the US economy if the US does not find a solution to contain them  .

Lmao. USA's GDP is still almost double that of China's GDP which is why you couldn't be more wrong here. Also, GDP isn't the only way to assess the economy of a country accurately.

[Unknown Op]

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

China GDP is based on Industrlization because they are supplies the products in the European countries. European countries dresses and cultural clothes are made in china and china progress was excellent before 1 year but now the government of China is corrupted and that's why china is going down and down and we will see less growth in future but their public should take step and there should be election and good leader should be on the seat which will take actions for the benefits of country.China GDP was at the top before few years and. After pandemic which was started from China, china came back and got respect in World because it took steps for the country. But now situation has been changed and Indian country is at the top because Indian government is less corrupted than any government.

[Swordsoffreedom]

The fact is they are still the second largest economy in the world and their GDP continues to grow every year and will soon catch up with the US economy if the US does not find a solution to contain them  .

Lmao. USA's GDP is still almost double that of China's GDP which is why you couldn't be more wrong here. Also, GDP isn't the only way to assess the economy of a country accurately.

The United States has been dominant for over 100 years so it is not hard to understand that they have the largest GDP in the world and completely outperform the rest of the world. But beyond the US, look at once-leading economies like Germany, the UK and Japan. Where have they been over the past decades when they were left behind by China, a country that was not highly regarded in the past? Tell me is there any country that doubled its GDP in a decade like China?

I don't know how many ways there are to evaluate a country's economy, but GDP is the index favored by experts, and China's having the second largest economy is the assessment and ranking of experts and recognized by the world, not mine.

[dezoel]

There is absolutely no possible way for China to catch up to USA, that's not going to happen. But the problem is not catching up, it's about the fact that they are creating their own shitty versions of products. USA has stuff like Tesla and Ford? China makes BYD and other shitty cars. USA has iphone? China makes huwai or whatever.

Basically, they are trying to take part of some markets, and that's understandable in the sense that they want more, but they are not aiming to be competition, they are not aiming to be better, they are not aiming to make a product that is better than what the American version is, the trouble here is that they are fine with making a shittier and cheaper product, so poor people can have it, but why make it so that poor people are forced to use shitty products? Make a decent product, and sell it cheap if you are thinking about the poor people. No, they don't give a damn about poor people, they are just making sure that they can have the cheaper market all by to themselves. So, it is not going to be awesome for anyone in the world, not USA, not anyone, when China just floods products everywhere for dirt cheap and can break down any moment.

[WillyAp]

There is absolutely no possible way for China to catch up to USA, that's not going to happen. But the problem is not catching up, it's about the fact that they are creating their own shitty versions of products. USA has stuff like Tesla and Ford? China makes BYD and other shitty cars. USA has iphone? China makes huwai or whatever.

Extreme views seldom reflect reality.
The hoovercraft is one example where China leads.

https://en.wikipedia.org/wiki/Jinsha_II-class_LCAC

[DrBeer]

....
China GDP is based on Industrlization because they are supplies the products in the European countries. European countries dresses and cultural clothes are made in china and china progress was excellent before 1 year but now the government of China is corrupted and that's why china is going down and down and we will see less growth in future but their public should take step and there should be election and good leader should be on the seat which will take actions for the benefits of country.China GDP was at the top before few years and. After pandemic which was started from China, china came back and got respect in World because it took steps for the country. But now situation has been changed and Indian country is at the top because Indian government is less corrupted than any government.

I agree that the Chinese economy is based on industrialization. But we need to remember who built it and whose money was used to build it? It was the same west that decided to move mass production to where it would be convenient and profitable to produce. it was the west that made China the China of today, from an agrarian third world country.
I am not ready to talk about Chinese corruption, but in my opinion, it is not the cause of China's current economic problems. The problem is the overestimation of the Chinese ruler's self-esteem and, as a consequence, the making of wrong decisions, namely the ruler and not the government. Because now Xi Jinping has left the vector of “capitalism with a socialist face”, and started to build a totalitarian, militaristic state, which fancies itself the second pole of the world.... This is the main misconception....

[doomloop]

China's economy seems alright at the moment considering everything, but it will probably experience decline soon thanks to Trump's trade tariffs when he assumes office early next year.

The fact is they are still the second largest economy in the world and their GDP continues to grow every year and will soon catch up with the US economy if the US does not find a solution to contain them  .

Lmao. USA's GDP is still almost double that of China's GDP which is why you couldn't be more wrong here. Also, GDP isn't the only way to assess the economy of a country accurately.

Every country is now running for his own influence in different regions as things are going we will have some changes in the USA as Donald Trump again going to work for stability of USA economy which is going to be important for him with China is surely now heading for their own markets and as they are working on BRICS with other big economies of region they are surely had good chance of improving their statics, but suddenly we have good conflict through this which is not ideal for any, but USA is not going to have any soft corner about BRICS because they are not comfortable with this.

Currently, we have USA GDP $28.78 trillion and China GDP $18.53 trillion but as we have some predictions this can slow down in future which is surely having his own impact but in near future we are going to have few serious changes.

[Swordsoffreedom]

There is absolutely no possible way for China to catch up to USA, that's not going to happen. But the problem is not catching up, it's about the fact that they are creating their own shitty versions of products. USA has stuff like Tesla and Ford? China makes BYD and other shitty cars. USA has iphone? China makes huwai or whatever.

Basically, they are trying to take part of some markets, and that's understandable in the sense that they want more, but they are not aiming to be competition, they are not aiming to be better, they are not aiming to make a product that is better than what the American version is, the trouble here is that they are fine with making a shittier and cheaper product, so poor people can have it, but why make it so that poor people are forced to use shitty products? Make a decent product, and sell it cheap if you are thinking about the poor people. No, they don't give a damn about poor people, they are just making sure that they can have the cheaper market all by to themselves. So, it is not going to be awesome for anyone in the world, not USA, not anyone, when China just floods products everywhere for dirt cheap and can break down any moment.

But you missed one thing, iPhone, Tesla or Ford are mostly manufactured in China and the largest factories of these corporations are located in China.

If China doesn't produce cheap goods, where will third world countries like yours and mine get the money to use products from the US, Germany, UK...?
Does America care about the poor? Do they care about poor consumers? Do you know how much Tesla, Ford, iPhone...products are worth and do you think they are made for poor people to use? Do you own something that is made in the USA or are you also using products from China because they are cheaper and better suited to your economic conditions? Do you use it voluntarily or are they forced to?

[bitgolden]

Chinese economy is based on industrialization. But we need to remember who built it and whose money was used to build it? It was the same west that decided to move mass production to where it would be convenient and profitable to produce. it was the west that made China the China of today, from an agrarian third world country.
I am not ready to talk about Chinese corruption, but in my opinion, it is not the cause of China's current economic problems. The problem is the overestimation of the Chinese ruler's self-esteem and, as a consequence, the making of wrong decisions, namely the ruler and not the government. Because now Xi Jinping has left the vector of “capitalism with a socialist face”, and started to build a totalitarian, militaristic state, which fancies itself the second pole of the world.... This is the main misconception....

Well, there is a very very simple argument to be made about why they overestimated themselves, which is because money was pouring in and they thought it would continue. They thought they could get rich off wests money and can battle west as well, like act as if they are somehow superior, even come on talk shows and talk about how they are getting better at everything, without realizing, producing something doesn't mean a thing if you can't sell that thing.

So they got snob and overestimated their power and the moment west started to buy less from them, and use their factories less, they realized there is a limit to money they could get, and you can bash west while asking them to buy your products at the same time.

Now they are forced to sell cheap stuff to poor nations and hope that would cover the difference, which it won't, and while they look like they are "growing", they are only growing in the sense of production and potential, but the real wealth is not going there anymore. They will end up being a liberal nation where rich are very rich, but poor are dying from healthcare problems and can't afford living, it's just obvious and they need to realize, they need to befriend west, instead of attacking them.

[STT]

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

None of these are an obstacle to China alone, every country must face challenges.   True strength is to overcome challenge and succeed through perseverance and vision.   The one thing that is a big deal for China is a falling working population, its overlooked but vital to growth factors.

Its a hidden positive for many countries who have a growing population but dont recognize fully the worth of what they have.   If you have people you have power and growth for an entire generation ahead, this gives planning a vital strut to build on.   China is all about the great plans and dictation given by their political elite but they forgot people make it happen and politics is a cost to pay not an asset.

[DrBeer]

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

None of these are an obstacle to China alone, every country must face challenges.   True strength is to overcome challenge and succeed through perseverance and vision.   The one thing that is a big deal for China is a falling working population, its overlooked but vital to growth factors.

Its a hidden positive for many countries who have a growing population but dont recognize fully the worth of what they have.   If you have people you have power and growth for an entire generation ahead, this gives planning a vital strut to build on.   China is all about the great plans and dictation given by their political elite but they forgot people make it happen and politics is a cost to pay not an asset.

As unpleasant as this may sound, for China. They couldn't come up with mechanisms that would solve a couple of problems:
1. Replacement of markets. Let me warn you, I know that China is colonizing some markets (Africa, Asia, Latin America), but it is not getting from these markets the profits it was getting from the US and EU markets.
2. China has not solved the issue of replacing Western technology and technological investment, and does not know what to do with the migration of production from China to other countries

...and without solving these problems, China's economy will continue to “fall into the abyss.”

[WillyAp]

But you missed one thing, iPhone, Tesla or Ford are mostly manufactured in China and the largest factories of these corporations are located in China.

manufactured yes but developed nope.
Some things are developed, just not consumer goods.

[DrBeer]

There is absolutely no possible way for China to catch up to USA, that's not going to happen. But the problem is not catching up, it's about the fact that they are creating their own shitty versions of products. USA has stuff like Tesla and Ford? China makes BYD and other shitty cars. USA has iphone? China makes huwai or whatever.

Basically, they are trying to take part of some markets, and that's understandable in the sense that they want more, but they are not aiming to be competition, they are not aiming to be better, they are not aiming to make a product that is better than what the American version is, the trouble here is that they are fine with making a shittier and cheaper product, so poor people can have it, but why make it so that poor people are forced to use shitty products? Make a decent product, and sell it cheap if you are thinking about the poor people. No, they don't give a damn about poor people, they are just making sure that they can have the cheaper market all by to themselves. So, it is not going to be awesome for anyone in the world, not USA, not anyone, when China just floods products everywhere for dirt cheap and can break down any moment.

But you missed one thing, iPhone, Tesla or Ford are mostly manufactured in China and the largest factories of these corporations are located in China.

It means nothing, except that the companies that developed the PRODUCT let the Chinese factories produce it. Today it is China, and tomorrow, for example, it will be India. But it will not make India the “owner of the product”. Just as now China and their industry are just manufactures allowed to make something. By the way, after the US companies shut down production in China, how will China load these huge facilities so as not to leave millions of people unemployed?  Will it be able to produce and effectively sell, for example, Tamagotchi instead of iPhone ? I.e. what and how will Chinese industry compensate for the departure of customers from the U.S. ? The problem is that China is used to its sites being busy, they get huge profits for fulfillment of orders from the USA.... But that's going to end soon... What goods with high added value will China be able to mass produce and where to sell?

[WillyAp]

how will China load these huge facilities so as not to leave millions of people unemployed?  Will it be able to produce and effectively sell, for example, Tamagotchi instead of iPhone ? I.e. what and how will Chinese industry compensate for the departure of customers from the U.S. ?

The problem is that the creation of a brand costs a lot, in time and money.
For a Chinese Iphone Producer he needs big and deep pockets, plus some years to get to Apple.
Even with blue prints at hand once they produce those its an oldish product. The Apple Appstore is huge and necessary to make the product whole.

[dezoel]

It means nothing, except that the companies that developed the PRODUCT let the Chinese factories produce it. Today it is China, and tomorrow, for example, it will be India. But it will not make India the “owner of the product”. Just as now China and their industry are just manufactures allowed to make something. By the way, after the US companies shut down production in China, how will China load these huge facilities so as not to leave millions of people unemployed?  Will it be able to produce and effectively sell, for example, Tamagotchi instead of iPhone ? I.e. what and how will Chinese industry compensate for the departure of customers from the U.S. ? The problem is that China is used to its sites being busy, they get huge profits for fulfillment of orders from the USA.... But that's going to end soon... What goods with high added value will China be able to mass produce and where to sell?

This is correct. Hell they even used tesla's free open public patents and created their electric vehicles as well, not really selling like Tesla though is it? Even though they have over a billion people, they are still not selling as much as Tesla. In the end, if apple comes out tomorrow and say they are moving manufacturing to India, there is nothing China can do, hence it's always important to remember who holds the power.

It is not the one who builds the product, it's the one who owns the company and that is why Apple is the strong one, Tesla is the strong one, not the factories that make anything for them. In the end, Tesla will eventually fail unless it evolves, because the lithium they need will run out, but that has nothing to do with China, hence I doubt that we are going to get a good result from any of this discussion. China could recover though, stop investing into real estate like crazy, like no more 10+ billion dollar complexes, and you will do fine, just improve your income instead.