China is heading for a 'lost decade' if it doesn't reform and grow, an analyst says

[War Lord]

• China risks a "lost decade" of slow growth if it doesn't reform its economy, warns an economist.
• This would mirror Japan's sluggish economic development in the 1990s as China faces property, demographic, and trade challenges.
• Beijing's is seeking a new economic model less reliant on debt-fueled growth.

China faces a "lost decade" of sluggish economic growth much like Japan if it doesn't reform its economy, according to an economist.

The assessment was made amid concerns about the world's second-largest economy as it struggles to stage a convincing post-pandemic recovery. "China could certainly have a lost decade of growth," Rory Green, the chief China economist at GlobalData.TS Lombard, wrote in a note on Thursday. Such a development would make China susceptible to so-called "Japanification" — a phenomenon that would mirror Japan's "Lost Decade" of economic stagnation in the 1990s after the country's asset and credit bubbles burst. China now faces multiple challenges, including a property crisis, deflationary pressure, a demographic crisis, and trade tensions with the West.

Despite its troubles, Beijing appears to still have reservations about stimulating the debt-laden economy — even though it knows the risks of not stimulating it enough.

After all, "part of the current economic malaise is man-made as authorities attempt to deal with past excesses — namely, property and local government debt," wrote Green.

Ideology clouds over Beijing's economic choices​

The country is currently facing an ideological problem rather than a lack of resources, which China does have, wrote Green.

"Since 2016, the policy reaction function has changed. Leaders are attempting to create a new political-economic model, one less reliant on debt-fueled property-led growth," wrote Green.

In particular, Chinese leader Xi Jinping is in the camp that "China must undergo painful structural reform before authorities can stimulate or risk exacerbating existing structural imbalances."

Meanwhile, technocrats in China generally believe China needs to reform and grow — or risk a Japan-style lost decade, Green added.

However, as China's economy continues its sluggish momentum, Green thinks Xi will shift to a more pro-growth mindset due to concerns about welfare and social stability. Even so, it would take a while for China's economy to get back on track.

"The old growth model is broken and a new one is emerging, albeit slowly," Green wrote.

 

[Beijingwalker]

No, China has been collapsing for 4 decades already, not just one decade.

 

[Beijingwalker]

 

[Developereo]

No, China has been collapsing for 4 decades already, not just one decade.

View attachment 19627

China keeps rising because it keeps ignoring these Western "experts".
LOL.

 

[GiantPanda]

All you need to know:

In 90s Japan, deflation was a function of stagnant/declining demand in a mature economy.

In China today, deflation is mainly a function of productivity-driven supply-side cost declines.

To view this content we will need your consent to set third party cookies.
For more detailed information, see our cookies page.

Accept third party cookies

 

[War Lord]

No, China has been collapsing for 4 decades already, not just one decade.

View attachment 19627

Clearly you and those who reacted to your post can't read the title correctly...

It says "Lost Decade"...


US has already replaced China with Mexico and Canada as its top trading partner:



More countries will follow suit.

 

[War Lord]

China keeps rising because it keeps ignoring these Western "experts".
LOL.

Right right...

 

[War Lord]

All you need to know:

In 90s Japan, deflation was a function of stagnant/declining demand in a mature economy.

In China today, deflation is mainly a function of productivity-driven supply-side cost declines.

To view this content we will need your consent to set third party cookies.
For more detailed information, see our cookies page.

Accept third party cookies

There's a lot more going on in China than just deflation.

Here's a list:

 

[Developereo]

Right right...

Every economy goes through rough patches.
China will pull through, no drama.

 

[War Lord]

Every economy goes through rough patches.
China will pull through, no drama.

Whether it pulls through or not the "decoupling" has already begun. In a decade you'll see much lesser demand for Chinese products.

Chinese posters on here, especially ones like BeijingWalker, themselves have said in other threads (on old PDF) that China is focusing more on internal consumption of goods rather than external. So as to mitigate $$$ spent on imports.

Pakistanis themselves have begun to make a lot more products in home then a decade ago. Source: The recent AzadChaiwala's "ChaiCon" where over 100 businesses showed their amazing products.

In one of his shorts, AC even mentioned a couple of grumpy Chinese coming to his ChaiCon (a convention) and cursing people for making products in Pakistan thus eliminating Chinese products from the market.

You can see some of the more successful recently made businesses of Pakistan here:

https://www.youtube.com/@AzadChaiwala/shorts

 

[Developereo]

Whether it pulls through or not the "decoupling" has already begun.

The decoupling is between the US and China, with some European countries trying to determine their place in the spectrum.

In a decade you'll see much lesser demand for Chinese products.

Chinese products will continue their rise throughout the world where they are not explicitly forbidden by American arm twisting.

US companies, on the other hand, may find it increasingly difficult to find markets because more and more people, and countries, will be wary of the threat of American sanctions. You never know which lobby will manipulate the American government to impose sanctions on any given day.

American products are currently superior in many ways, but Chinese companies are catching up. In many things, you don't need the latest and greatest. Chinese products are usually better value for money and they are sanction free; American companies will find it increasingly harder to compete.

 

[Beijingwalker]

Clearly you and those who reacted to your post can't read the title correctly...

It says "Lost Decade"...


US has already replaced China with Mexico and Canada as its top trading partner:

View attachment 19728

More countries will follow suit.

China is decoupling the west and prioritizing its trade with emerging economies, this is news to you?

 

[Beijingwalker]

China Balance of Trade​

China's trade surplus increased to USD 75.34 billion in December 2023 from USD 70.65 billion in the same period the previous year, surpassing market forecasts of USD 74.75 billion. It was the largest trade surplus in three months, as exports grew more than imports. Exports rose by 2.3%, beating forecasts of a 1.7% growth, while imports edged up by 0.2%, compared to market expectations of a 0.3% rise. For the 2023 full year, the country posted a surplus of USD 823 billion, with exports falling 4.6% to USD 3.38 trillion while imports dropped 5.5% to USD 2.56 trillion. The trade with the US was at USD 664 billion in 2023, down 11.6% from 2022, the first decline since 2019. Meanwhile, trade between China and Russia reached USD 240.1 billion, hitting a new record high in 2023, growing 26.3% from a year earlier. source: General Administration of Customs

China Balance of Trade

China recorded a trade surplus of 75.34 USD Billion in December of 2023. This page provides - China Balance of Trade - actual values, historical data, forecast, chart, statistics, economic calendar and news.

tradingeconomics.com

 

[Beijingwalker]

China's trade and surplus with the west is decreasing but overall is not. US is just so dumb to pay Mexico and some other countries more transition fee for the re exported Chinese goods.

 

[War Lord]

China is decoupling the west and prioritizing its trade with emerging economies, this is news to you?

Already well aware of it buddy.