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China clings to an outdated economic model despite international warnings

China clings to an outdated economic model despite international warnings

Bitter taste. Chinese President Xi Jinping during the last conference of the Chinese Communist Party, which was held in the first days of last March (Reuters)

In an opinion column I published Foreign affairs, Daniel H. Rosin And Logan Wright Addressing the stagnant Chinese economy, stressing that “China has achieved little growth in the past two yearsAlthough the immediate reasons for this slowdown are known, such as a decline in real estate construction and restrictions on investment.Zero CovidWhich led to a decline in private sector investment, Rosin And I saw They confirm this The problems are systemic.

Attention of companies and analysts at home Chinaas well as governments and companies around the world, focuses on plans Beijing To stabilize the country's economy. Between 2010 and 2019, the annual growth of gross domestic product to China Growth averaged 7.7%, but today, the policy reforms needed to maintain 3 or 4% growth represent a major challenge to the regime he leads. Xi Jinping.

Rosin And I saw They are recognized specialists in the Chinese economy. In their analysis, they point out the implications of current policies and expectations regarding the current situation National People's Congress, the most important political event in the country's calendar. However, after its conclusion on March 11, the policies announced do not herald a change in direction. “The results (of Congress) will increase the legitimate concerns of foreign countries rather than allay them“The authors warn. They emphasize that, faced with an economic situation requiring structural reforms, the heads of the communist regime chose to continue on this path, which deepened the country's economic dependence on sources of external demand.

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China's strategy of export- and investment-led growth is under criticism. “Which suggests that Beijing is not implementing the kind of fiscal policies that would boost domestic growth.”“, I refer to the authors of the article Foreign affairs. On the other hand, they accuse Beijing Directing financial and credit resources towards local investments instead of direct transfers to families to enhance their consumption. This lack of support for domestic consumption coupled with export-friendly policies exacerbates the country's trade surpluses. China It raises the foreign deficit, which threatens competition and the continuity of companies and workers in other countries.

next to, Rosin And I saw Address anxiety that China It continues to expand its manufacturing capacity to increase exports despite warnings from various governments and economists. “Beijing has shown no signs of taking these requests from Western governments into consideration.“, they confirm after analyzing the policies announced at the last conference of Communist Party of China. They point out that the country's industrial policies – which focus on sectors such as electric cars, batteries and solar cells – are not only questionable internally, but also threaten to undermine competitors in advanced and developing economies.

The international response to these policies, including research, has been varied Anti-dumping Against Chinese exports to calls China Consider the impact of your export volume. According to the authors and members Think tank Rhodium groupand trade confrontation resulting from current policies China Not only is it affecting the country's relations with advanced economies, but it is also beginning to strain its relations with other members of the G20. BRICSthe mass of which it is composed Russia, India, Brazil And South Africa. The situation indicates that without major structural reforms at the internal level, China is heading toward deeper trade conflicts with global ramifications.

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In conclusion, Rosin And I saw They argue so Beijing These countries appear to lack not only the will but also the capacity to effectively address domestic economic imbalances. This reluctance to reform policies that favor trade surpluses forms the basis of the current economic and trade conflict with the rest of the world. The analysis highlights the need to China And make fundamental reforms to avoid an irreversible split in global trade and protect the country's economic health.

Chinese officials often say that Beijing is not deliberately pursuing a trade surplus. Whether China's trade imbalance is intentional or not, it is not sustainable for the rest of the world, and China should not be surprised if foreign governments begin to respond more aggressively.“, analysts warn. They conclude: “With few effective policy options and an unwilling negotiator in Beijing, Western governments in particular will consider imposing strict restrictions on Chinese trade. This shock may be what it takes for China to get serious about structural reforms, for the sake of its economic health and in the hope of avoiding an irreparable collapse of global trade.“.