US Intel Report Paints Bleak Picture of China's Economy

[F-22Raptor]

China's economic hurdles will likely increase as Xi Jinping doubles down on his state-directed approach to development, according to an assessment by the U.S. intelligence community.

"During the next few years, China's economy will slow because of structural barriers and Beijing's unwillingness to take aggressive stimulus measures to boost economic growth," read the Office of the Director of National Intelligence's (ODNI) annual worldwide threat report released Monday.

Instead of roaring back after the end of its lengthy "zero-Covid" lockdowns, China continues to suffer from what The Economistdubbed "economic long Covid." The symptoms include slowing growth, low consumer confidence, high youth unemployment, falling foreign investment, and the aftermath of its collapsed property market bubble.

"Beijing understands its problem but is avoiding reforms at odds with Xi's prioritization of state-directed investment in manufacturing and industry," the report says.

The report pointed to a longstanding belief in Beijing that the tech-savvy second-largest economy would leave the West behind, malaise has set in and is set to deepen, the report said, citing China's aging workforce and cratered investor and consumer confidence on the back of Xi's top-down policies.

Haunted by the unchecked expansion that led to the country's real estate crisis, Xi is prioritizing a "high-quality growth" model of state-directed development of strategic industries instead of maximizing overall growth.

China's continued slowdown would reduce its demand for global commodities, leading to a glut that will drive down prices worldwide, and slow global growth.

Long-term constraints would force the country's economic stewards to make difficult choices when prioritizing the industrial, military, and social policies, as well its capacity for overseas lending—a key driver of Beijing's international influence, the report forecast.

However, this belt-tightening is unlikely to affect the one-party state's core priorities, the authors said.

 

[Beijingwalker]

lol, of course, China is crashing..

 

[Menthol]

It's not China problem alone.

But most countries have the same problem.

USA prints money and robs the rest of the world, so in the statistics it looks fine, but on the street is a different story.

 

[Menthol]

China should have a plan to separated itself from USA financial system, creating their own financial system.

So far, it's USA who print the money, and gave the money to China in exchange for good that makes China wealthier.

But now USA is stopping sending money to China, China GDP will stagnant.

Technological improvements and an increase in production efficiency don't always lead to an increase in GDP, somehow, it's even lowering GDP.

A product that usually costs around USD 100, because of technological advancement and production efficiency, now the cost is just around USD 50.

Imagine from 100 to 50, how much GDP is losing?

Yes, it will improve people's living conditions, since in the past with USD 100 people can only get one, but today they can get two.

But not too long, since in the end, the price of natural resources is getting more expensive following the price of USD.

One day, China will be in position when they can produce anything cheap, they can fulfill their domestic need, but when going aboard, China is actually a poor country.

 

[Antonius123]

China should have a plan to separated itself from USA financial system, creating their own financial system.

So far, it's USA who print the money, and gave the money to China in exchange for good that makes China wealthier.

But now USA is stopping sending money to China, China GDP will stagnant.

Technological improvements and an increase in production efficiency don't always lead to an increase in GDP, somehow, it's even lowering GDP.

A product that usually costs around USD 100, because of technological advancement and production efficiency, now the cost is just around USD 50.

Imagine from 100 to 50, how much GDP is losing?

Yes, it will improve people's living conditions, since in the past with USD 100 people can only get one, but today they can get two.

But not too long, since in the end, the price of natural resources is getting more expensive following the price of USD.

One day, China will be in position when they can produce anything cheap, they can fulfill their domestic need, but when going aboard, China is actually a poor country.

GDP nominal will not necessarily loosing when the price of goods drop as long as consumers doesnt keep the spare money for saving but keep buying more goods/service.

In fact it will increase GDP PPP.
And when China can sell more to overseas due to cheaper price, the RMB value will increase that will finally increase GDP nominal too.