Go with what’s been working or shift gears is always hard strategic decision and inertia is important.
However, what is different now is the Trump demolition of the global system. If China can’t count of consumers in the US and EU, Japan and Korea, and Australia the domestic consumption matters greatly.
Trump and his supporters and enablers have set the US on a dangerous path. While soybean farmers are selling ZERO product to China and going bankrupt, Kristy Noem is buying a pair of planes for $175 million for her travel and Trump is building an ostentatious ballroom. And for what? Parties and photo-ops?
When will the Congress, SCOTUS and MAGA wake up to what is going on and stop this madness? The list of Corporate America funding the ballroom and sucking up for tariff and tax breaks is against everything MAGA says they care about.
Frankly, the problems internal to China are about 113th on my list of problems the US has to deal with. America is anything but great right now unless you are a billionaire.
Deng Xiaoping lit an experimental fire circa 1980 that caught and spread. This largely explains the first set of growth figures. WTO accession combined with growing free trade and globalisation explains the next set. Double digit growth figures can’t last forever. The problems of growth at China’s scale are nearly unprecedented; one is constantly reminded whilst in China of the shear numbers of people. Many US cities are smaller than Chaoyang district in Beijing. Thus, “
As can be seen in the chart below, the five-year GDP growth rate, which peaked at 12.5% during the Eighth Five-Yer Plan (1991-95), is likely to be well less than half that in 2025 at 5.4% when the current 14th five-year plan draws to a close.”
Growth is a problem for most the developed world; China continues to print figures that most in that group would love to achieve. No doubt there’s still room for improvement, but, as ever, performance should be viewed relative to benchmark.
A further boundary constraint for planners must be an objective to continue to strengthen defences, so that the country can never again suffer humiliation at the hands of foreign powers as occurred at the turn of the 20th century. Continuing to prioritise domestic innovation should be seen as part of this, given geopolitics of the day. That said, there is loads of innovation taking place, but SOEs have the inner lanes of the economy. Policies to help support innovation by the private sector would help, including international expansion; the brutal domestic competition risks killing off part of the private sector, which could in time come to resemble Germany’s Mittlestand albeit at 100x the scale.
Big boss in China has a tendency to double down on what works and slow to change course.
China did extremely well in the first year of the pandemic, due to its quick to action and harsh shutdown efforts. it saved countless lives.
but when omicron hit and quarantine was not longer an effective solution, China doubled down its lockdown measures and was slow to adapt to vaccines. Dynamic zero covid was more of a hope and dream than a feasible public health policy.
the public and the economy paid its price eventually when it had to open up.
to proactively shift away from what has been working (tech, manufacture), in order to preposition for the future (shift to consumption) which is always unknown, is inherently a higher risk/higher reward political decision. Staying with what works is safe and politically sensible.
China will eventually rebalance toward to the demand side, shifting to a consumption driven model. it needs a bit more time.
Go with what’s been working or shift gears is always hard strategic decision and inertia is important.
However, what is different now is the Trump demolition of the global system. If China can’t count of consumers in the US and EU, Japan and Korea, and Australia the domestic consumption matters greatly.
Trump and his supporters and enablers have set the US on a dangerous path. While soybean farmers are selling ZERO product to China and going bankrupt, Kristy Noem is buying a pair of planes for $175 million for her travel and Trump is building an ostentatious ballroom. And for what? Parties and photo-ops?
When will the Congress, SCOTUS and MAGA wake up to what is going on and stop this madness? The list of Corporate America funding the ballroom and sucking up for tariff and tax breaks is against everything MAGA says they care about.
Frankly, the problems internal to China are about 113th on my list of problems the US has to deal with. America is anything but great right now unless you are a billionaire.
Deng Xiaoping lit an experimental fire circa 1980 that caught and spread. This largely explains the first set of growth figures. WTO accession combined with growing free trade and globalisation explains the next set. Double digit growth figures can’t last forever. The problems of growth at China’s scale are nearly unprecedented; one is constantly reminded whilst in China of the shear numbers of people. Many US cities are smaller than Chaoyang district in Beijing. Thus, “
As can be seen in the chart below, the five-year GDP growth rate, which peaked at 12.5% during the Eighth Five-Yer Plan (1991-95), is likely to be well less than half that in 2025 at 5.4% when the current 14th five-year plan draws to a close.”
Continuing with fat fingers…
Growth is a problem for most the developed world; China continues to print figures that most in that group would love to achieve. No doubt there’s still room for improvement, but, as ever, performance should be viewed relative to benchmark.
A further boundary constraint for planners must be an objective to continue to strengthen defences, so that the country can never again suffer humiliation at the hands of foreign powers as occurred at the turn of the 20th century. Continuing to prioritise domestic innovation should be seen as part of this, given geopolitics of the day. That said, there is loads of innovation taking place, but SOEs have the inner lanes of the economy. Policies to help support innovation by the private sector would help, including international expansion; the brutal domestic competition risks killing off part of the private sector, which could in time come to resemble Germany’s Mittlestand albeit at 100x the scale.
Big boss in China has a tendency to double down on what works and slow to change course.
China did extremely well in the first year of the pandemic, due to its quick to action and harsh shutdown efforts. it saved countless lives.
but when omicron hit and quarantine was not longer an effective solution, China doubled down its lockdown measures and was slow to adapt to vaccines. Dynamic zero covid was more of a hope and dream than a feasible public health policy.
the public and the economy paid its price eventually when it had to open up.
to proactively shift away from what has been working (tech, manufacture), in order to preposition for the future (shift to consumption) which is always unknown, is inherently a higher risk/higher reward political decision. Staying with what works is safe and politically sensible.
China will eventually rebalance toward to the demand side, shifting to a consumption driven model. it needs a bit more time.