CHINAwatch

New virus in China?

TV panel discussion on NewsX World, India's fastest growing English-language news channel with 100 million viewers. 

Innovation in the Fast Lane: Discussing China’s Auto Industry - CSIS podcast

An insightful podcast dated 12 August 2024 interviewing Michael Laske, a sage American veteran auto industry consultant in China. The podcast is part of the China Field Notes series hosted by leading US China expert Scott Kennedy,  senior adviser and Trustee Chair in Chinese Business and Economics at the Washington D.C.-based Center for Strategic and International Studies (CSIS).

Both experts have decades of leading hands-on field work inside China. Their balanced take throws light on how, with an all-society ecosystem of joint ventures, technological manpower, government direction, and mastery of full-spectrum supply and value chains including a digitally-connected economy,  China has emerged relatively rapidly from a student of internal-combustion-engine (ICE) cars to becoming the new Detroit for electric vehicles (EVs), automobiles of a hopefully-greener 21st century. 

 

U.S. and China: Edging Toward the Brink?

US and China: Edging towards the brink? - Under the auspices of Washington D.C. based Aspen Institute, Niall Ferguson, the celebrated historian who predicted Cold War II in 2018, assembled some of the sharpest minds from both sides for an in-depth debate (Aspen Ideas Festival) on the future of U.S.-China relations, featuring David Daokui Li, Andrew Erickso, Keyu Jin, and Matt Pottinger.

The debate is extremely useful as it sharpens the often-twisted popular rhetoric, focussing on how best to "read China" with more productive perspectives, including difference in national psyche, cultural DNAs, the Taiwan issue, China's new "Generation Z", China's pragmatic priorities in the coming decades, and the need for more people-to-people exchanges.  

Challenges and Prospects of the Chinese Economy: an exclusive in-depth video interview with Rome-based World Geostrategic Insights

Video interview of 8 May 2024 with Rome-based World Geostrategic Insights . YouTube link

The online lady interviewer hails from Istanbul, Turkey. 

China: Keeping the dragon awake

The above February 2024 report by Allianz Research, part of the global Allianz Group hearquartered in Germany, confirms China's resilient yet slowing economy in search of new drivers for long-term growth.  Download 2024-02-07-China - Allianz

In particular,  

(a) China is heading towards lower trend growth. China's US$17.52 economy (2023), the world's second largest, cannot be expected to continue past high-digit growth indefinitely. Just look at America's trend growth rates in recent decades. 

(b) In 2023, residential completions came in at 724mn square meters (+16% y/y), outpacing for the first time the volume of housing starts (693mn square meters, -21% y/y). This has helped reduce inventories and stabilize prices at the national level. The ongoing crisis may be a necessary adjustment towards a low-growth but more sustainable property market. Beyond the ongoing crisis, the rapidly aging and shrinking population, coupled with slowing urbanization, puts a brake on the long-term growth of the real estate sector. 

(c) With its real estate and foreign investment engines sputtering, China desperately needs new drivers of growth.  The target is for higher value-added manufacturing such as the ‘New Three’ industries of electric vehicles, batteries and solar energy products. .

(d) Exports are still going strong. Supporting the nation's growth, China's centrality in the global supply and value chain remains robust, de-coupling or de-risking regardless. The intensity of critical dependencies on China varies across importers, with the US being the most exposed: nearly 50% of its imports from China are critical dependencies. A shift in concentration of critical dependencies towards higher value-added sectors is clearly visible, especially when it comes to EU imports from China.

(e) According to ASPI's March 2023 Critical Technology Tracker, China is leading by far in research breakthroughs related to critical technologies, but the translation into manufacturing is not yet clear in all cases.

(f) Chinese competitive electric vehicles (EVs) have taken the world by storm in just a few years. China is becoming the "New Detroit" for EVs globally. 

(g) China accounts for more than 80% of the global solar module manufacturing capacity and more than 80% of solar cell exports. It has the largest installed renewable capacity, exceeding 228 gigawatts (GW), more than the rest of the world combined, well ahead of the nation's original 2030 target. This trajectory reflects a broader strategic shift towards securing a dominant position in the global energy transition and making clean technology a cornerstone of national industrial policy. 

(h) The comparison with Japan's "Lost Decade" is overhyped. China’s GDP per capita is roughly 40% of that of Japan in 1991, suggesting significant further room for growth. China’s urbanization rate currently stands at 66%, still a long way from the 78% observed in 1991 Japan. The Chinese economy can still rely to some extent on exports. Unlike 1991 Japan, China does not have an equity market bubble and its capital account is not fully liberlaized. 

(i) Further pockets of growth could be found on the consumer side. Policies to strengthen the social safety net and increased public spending in healthcare and pension-related services would most likely allow Chinese households to save less and consume more. However, comprensive policy support seems to be lacking for now.

(j) Watch out for intensified headwinds such as chips war, protectionism, geopolitical tensions and the risk of creating other situations of excess capacities, inventories and leverage.

China's defeated youth

A product of China's now-defunct "One Child Policy", a sizeable proportion of the nation's millennials have had their nests well-feathered during China's "golden era" of sustained prosperity, which saw the nation leapfrogging to become the world's second largest economy. Theirs are the so-called "4-2-1" generation: much-better times saw them grow up as a single child each pampered by two working parents and their respective grannies. 

Sure they have had their years of hard grind as they faced unrelenting competition for admission to university, not to mention a prestigious one. But once they graduated, they were generally assured of a more secured future. 

No longer. A host of deep-seated domestic and global challenges are catching up on China in a "perfect storm" of changes, and opportunities, "not seen in a hundred years", as flagged up by President Xi from time to time. 

As China is trying to cope with a much more hostile external environment and systemic domestic economic challenges, job opportunities for graduates have dwindled, compounded by a record-high supply of 12 million new graduates a year. This comes at a time when the Fourth Industrialization is re-shaping how lives and work are organized and distributed, resulting in disappearance and sea-change of many job requirements. The prohibitively-high cost of raising a family including housing and education adds to a sense of frustration and despair. 

Their hopelessness and negative feelings, however, are not commonly shared by their parents', let alone grandparents' generations, who had weathered much worse times, often with untold personal sacrifices. 

All this is well captured by The Economist (17 August 2023) expose China's defeated youth.

It will take time, perhaps a decade or so, for China's young generation to adjust to these new realities. 

In any case, against all odds, China's trajectory appears to be on track to unfold a new era of renaissance, where the current "defeated" youth will have to rise to unprecedented challenges and opportunities. Click here.

 

The Debate: Xi Jinping Handed Unprecedented 3rd Term, What Does It Mean For India?

Live TV panel debate with Republic TV of India on 11 March 2023

RTHK (Radio Television Hong Kong) on economics of the Two Sessions in Beijing

BackChat on RTHK on 6 March 2023 (My intervention start from time counter 15:50 and 28:33 in the first bar.)

"After coming to live in China, I have loved it here" - American digital entrepreneur Cyrus Janssen

A YouTube video clip of Cyrus Janssen's TED Talk in January 2023 illustrates why the world needs the ancient Chines adage 和而不同 "Harmony despite Differences" flagged up as a third bullet point in my China Daily op-ed of 10 February 2023. 

China's re-emergence from the Covid-pandemic - A roundup on Russia's NTV weekly analytical show

Exclusive TV interview on Russia's NTV's weekly analytical program "Central Television" on China's handling of the Covid-19 pandemic. 

Unedited original video recording (in English) shot in Repulse Bay, Hong Kong on 20 January 2023. 

Actual program broadcast in Russian on 21 January 2023