CHINAwatch

China-Africa Summit 2024 - What are the implications

Backchat  on RTHK (Radio Television Hong Kong) on 6 September,  

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.

"Two Sessions" Beijing meeting - debnking some myths about China's economy

Backchat on RTHK (Radio Television Hong Kong) on 12 March 2024 (My intervention starts midway at 26:45) ) 

US-China De-Risking Policy - Risks and Opportunities for Hong Kong

A Hong Kong business lunheon presentation on 11 November 2023. Download US-China De-Risking Policy - Risks and Opportunities for HK

New World, New Order How to reposition ourselves for a New Economy

Download New World New Order - How to reposition for a New Economy (A business dinner presentation) 

China's Role in a Multipolar World

PowerPoint presentation at the 10th Annual Conference on International Studies, Center for Strategic Research and Analysis, Lisbon, Portugal 14-15 September 2023. (CESRAN 2023) (An online presentation) 

Download China's Role in a Multipolar World - CESRAN 2023 (New) [Autosaved]                                                                                      

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.

 

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.)

China's "global ambitions" according to two prominent Western sinologists

In Daring to Struggle: China's Global Ambitions Under Xi Jinping (10 June,2022), Bates Gill, Chair of the Department of Security Studies at Macquarie University and Senior Associate Fellow at the Royal United Services Insitute in London, focuses on China's six perceived strategic interests: Legitimacy; Sovereignty, Wealth, Power, Leadership and Ideas.

The Ideas consist of four strands - (a) a new global era with dynamic "changes not seen in a hundred years" as backdrop for the struggle to realize the China Dream of national renaissance; (b) an aim to build a "Community of Common Destiny" for mankind beset with interconnected and inter-dependent challenges like Climate Change and global security; (c) achieving global "unity with diversity" in international relations, relying on China's ancient adage of "harmony despite differences" (和而不同); and (d) seeking "Chinese Solutions" for global challenges instead of blindly following a superficial, one-size-fits-all Western hymnbook.  

In The Final Struggle: Inside China's Global Strategy (2022), Ian Eason, Senior Director of the Project 2049 Institute, based in Arlington, Virginia, USA, tries to turn President Xi's concept of "Common Destiny" on its head, hyping it as a sinister plot to achieve global dominance by shaping a panopticon "world government" bent to his will. Understandably, to veteran China-bashers and those otherwise infected with Sinophobia, every curved shadow would look like a snake, as the Chinese saying goes. (杯弓蛇影)

Eason's overhyped narrative and wafer-thin understanding of China notwithstanding, eye-catching infographics by Louis Martin Vezian are perhaps the most interesting parts of the book, showcasing at a glance how much national progress and global influence China has achieved over recent decades under the Chinese Communist Party (CCP). The following reproduced infographics may come in handy by way of reference or reminder. 

Download China's One-World Government (Louis Martin-Vezian)

Download Taking Over International Institutions (Louis Martin-Vezian)

Download Wall Street PRC (Louis Martin-Vezian)

Download PRC Owned IoT in America (Louis Martin-Vezian)

Download Compromised Container Ports (Louis Martin-Vezian)

Download We Surround You (Louis Martin-Vezian)

Download China is the Future (Louis Martin-Vezian)

Download Buying Global Influence - (Louis Martin-Vezian)