This is a topic that we touched upon briefly but really did not go deep into the subject.
Now that the latest Party Congress festivities are over, we can see how a major shift is underway. And this will lead to a completely new economy, one where China is not a global leader.
It is a topic that many will not believe since the mainstream media (especially financial) espouses exactly the opposite. Keep in mind, the West always needs a bogeyman and, after watching the latest version of Halloween, Michael Myers is not available.
Nevertheless, Xi has been angling this for a while, so for those who were attentive to what is taking place, it is no surprise. The decent into Maoism is upon us.
Extreme Nationalism
The talking point about China most of the last 40 years was growth. There was sound reason for that since the country had some of the highest growth rates, at least for a prolonged period, in human history. The country was able to pack in 150 years of growth in the US in about 3 decades.
This was an incredible story. Unfortunately, it was over. And this is something Chairman Xi was accutely aware of.
If you havent noticed, Xi changed the rhetoric. Growth was no longer the top story. Instead, he turned to nationalism. It was essentially the "we all have to stick together" mantra.
The reason for this is he was well aware that China's growth was about to hit a wall. For much of the past decade, the growth numbers were a mirage. This does not mean they were fake although Chinese stats are often taken with a grain of salt. What this really entails is the fact that, outside of infrastructure spending, there was little growth taking place. This does not bode well for a country that is still "trying to get rich".
Since the growth story end, Xi turned to the nationalism angle. He would have done this sooner if not for Trump challenging him with verbal assaults, tariffs, and the banning of Chinese companies. In spite of that, he still did forecast lean times ahead all the way back in 2019.
With the most recent Congress, Xi has all but secured full power. This was not really in question since he had it already. Anyone who opposed him is no longer visible. The events over the last few days only further enforced this position.
Losing China's Growth
China served a major economic purpose over the last few decades: it was responsible for global growth rates. Japan was flat for most of the last 25 years. The US and Eurozone stuggled with low single digit rates. This left China as the sole epicenter for any signficant economic activity.
That is now ending.
So how will the world adjust to losing the main driver of growth? How will it adapt to a field where much of the developed world, including China faces major demographic issues? What is going to step in as a replacement?
All of this is something we do not hear discussed. With the absence of leadership in the West, and the push for war, we tend to miss what is taking place. The reality is that, economically, there are some serious headwinds confronting us over the next decade or more.
Demographics are just one issue. Another is the complete reworking of the global economy. It is evident that we will not see a repeat of the last 40 years. The old order is rapidly dying. Globalism, as we knew it, is now in decline.
While this might be good in some ways, there is little doubt that the last few decades were the most prosperous in history. More people were raised out of poverty than ever before. Trillions of economic productivity was added, allowing billions to join the middle class.
That is facing serious opposition now. If we remove China form the board as a center of growth, we realize there are few options.
The challenge is Xi is smart. He is not taking htis step by mistake. There is no way he has overlooked the demographic issues he is faced with. This makes the economic productivity and consumption rates very troubling. They are in jeopardy.
We are now feeling the effect of a slowdown in China. This is taking the entire global economy with it. Since it was the driver, now that it is stalling, the car refuses to move much.
The China economic story is nearing its end. Xi is taking the country in a direction completely different than his predecessors. In fact, he is harkening back to the days of Mao.
That does not mean everything will be undone. What it does mean, though, is that China, like Japan before it, will not catch the US as the largest economy. It also means that the country is going to be become more isolated. This is the lesson Chinese history reveals. The nation never really stayed on the global stage too long. Part of this was due to geography but another part, perhaps larger, is the culture.
Whatever the cause, get ready for a post-China world.
That engine is about to disappear.
If you found this article informative, please give an upvote and rehive.
gif by @doze
logo by @st8z
Posted Using LeoFinance Beta
The rewards earned on this comment will go directly to the people( @rzc24-nftbbg ) sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.
This post has been manually curated by @bhattg from Indiaunited community. Join us on our Discord Server.
Do you know that you can earn a passive income by delegating your Leo power to @india-leo account? We share 100 % of the curation rewards with the delegators.
Please contribute to the community by upvoting this comment and posts made by @indiaunited.
@tipu curate
Upvoted 👌 (Mana: 15/35) Liquid rewards.
The growth was bound to stop at some point but I think some other country will pick up the lack in it's place. It makes me wonder what will happen to those with a ton of investment money into China though without this growth.
Posted Using LeoFinance Beta
I don’t know why we always choose to stop what is working for us, I won’t be surprised if the growth in China stop but what will be the fate of countries that China growth influence their growth
Posted Using LeoFinance Beta
The demographics or China are a showstopper. There is no going around that. I hope Xi won't be as stupid as to try and conquer Taiwan. The West has an off-switch when it comes to the Chinese economy. China imports most of its energy and raw materials from far a way. Its markets are in the West. China is able to project military power only about a thousand miles from its coast. The West is capable of destroying the Chinese economy much faster and much more thoroughly than the economy of Russia.
China's rapid development in the last 45 years is a consequence of a deal between Nixon and Mao that opened up China to the global economy. The motive for the deal was to break up the communist bloc, that is, security policy. China's growth has been sponsored by US tax payers. The US does not have to do anything except stop policing the world's oceans to keep trade routes open to make life difficult for China. If the US did that, which it has already begun doing, that will usher a new era of regional powers and small-time imperialism in Eurasia. Suddenly, China will find itself having its foreign trade at the tender mercies of its traditional enemies including Japan and Vietnam and rivals such as India.
The geography of China is not conducive for China to become a world power. While it did have an ambitious program of explorations started about ten years before the Portuguese in the early 15th century, that did not last very long (Admiral Zheng's voyages). China was forced to redirect the resources reserved for that to guard its northern border.
With security concerns at the forefront again, China's prospects for further economic expansion while sponsored by the US are nonexistent.
"The challenge is Xi is smart."
Not as smart as some people think. Just like other dictators before him, eg. Mao, he is good at manipulating & dominating people, but else ...
He is at least partially responsible for China's economic problems, although a slowdown was coming, anyway. Now he has done away with the last somewhat pragmatic politburo members with some economic background & instead stuffed the politburo with sycophants.
From here on, it will probably get only worse.