Chinese President Xi Jinping (second right) says rising unilateralism and protectionism is forcing China to become more self-reliant, and “it’s not a bad thing”. Photo: Xinhua
Frank Tang, SCMP: As trade war with United States rages on, China looks inward to keep economy rolling
Field visits by President Xi Jinping and Premier Li Keqiang suggest the country’s leaders are keen to boost the domestic economy
With no sign of a let-up in the trade war with the United States, China’s top leaders are looking inward for new growth drivers in a move that could affect the nation’s economic trajectory in the years ahead.
While Beijing is keen to attract foreign investors by trumpeting its efforts at “opening up”, it is also preparing for the possibility that growing international hostility might make it tougher to sell products to and acquire advanced technology from the US and other wealthy nations.
In a white paper issued late last month, China said it planned to revitalise its domestic market by making its rust belt and vast countryside more self-sufficient.
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WNU Editor: China got to where it is today because of two economic initiatives that former Chinese leader Deng Xiaoping initiated in the 1980s. Open the country to foreign investment that would build its manufacturing base and in turn open export markets. Encourage the development of small and medium businesses to employ Chinese workers. Under President Xi .... this is now all in jeopardy. Presdient Xi has jeopardized not only Chinese export markets (primarily the U.S.), but he has initiated a tight credit policy that is hurting Chinese businesses. President Xi may believe that China can grow internally .... but I do not see it, and neither do my many business contacts in China.
7 comments:
I don't know, there would be a pull back no question but with the right banking controls in place they could pull this off. We'll see.
The "investor class" doesn't seem to believe that China can pull this off either or so it would seem. Wall Street seems to have held its own through this and even gained a bit whereas China's stock market seems to be hurting. The so called investor class has a long history of generally getting things like this right.
As of right now, it seems that China is clearly not winning the "trade war." Will they then try and make it a military war. If they do, frankly their chances of prevailing in such a conflict with America would be quite good. While we cannot "know" in advance of such a conflict, I would put China's chances of prevailing in a military conflict with America t somewhere between 85 to 90%. With that said I think we could make this extremely costly for them.
One would think they would wish to avoid this. Unfortunately we may not be dealing with rational actors here. Clearly the current trade situation was not/is not sustainable and had to be renegotiated. China could have very easily agreed to renegotiate in good faith and, given the current lopsided nature of our trade arrangements, they should have been able to easily come to an agreement that would have respected American interests while maintaining substantial profits for China.
In my industry we pulled out of China a while ago..moved all production and offices to Thailand and Vietnam. .better prices, better service, no extortion..think it was a great move, painful to do as we jumped on board the China hype just a decade ago but glad we did it, because now it's just not worth it anymore
Anon (2:46PM),
What you posted pretty much mirrors what I have been hearing from others as well. Essentially it appears to me that they overplayed a fabulous hand. If the theory of the brilliant Chinese is not out right busted, there does at least seem to be considerable evidence against it. At the very least, they don't appear as tough as they once did.
Trump recognized China is a one trick pony. All it knows is churning out exports, most of it low tech stuff that can be replaced elsewhere. There are exceptions such as rare earth minerals they could withhold but that will cost them markets down the road. Disrupt Apple's supply chain via obstructions, higher fees and the like, Apple may not like continuing business in China and where Apple goes, so goes many American and European based firms. Speaking of Europe, the natural pivot is to them but they are far more afraid of China than the US, so they won't take China's surplus exports either.
Give Trump credit for seeing the weaknesses in China's economy and then exploiting them as hard as possible.
I'd love to hear the prior occupant of The White House' comments. After all it was he, don't forget, who laid the foundation for Trump's success's so far.
Let me beat my drum again; all those Japanese owned golf courses in California are in different hands now. In the early 80's Japan's economy was the must copy for success economic model. They were rolling in the yen like Scrooge McDuck in his silver dollar filled swimming pool.
I date myself again.
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