Behind the Money China’s economy braces for Trump
Nov 20, 2024
Joe Leahy, the China bureau chief for the Financial Times, sheds light on the current struggles of the Chinese economy, marked by a potential deflationary spiral. He delves into the impacts of Donald Trump's election on China's growth ambitions, as well as the government's response through new stimulus measures. The discussion also covers the pivotal role of local governments in economic revival and the challenges posed by diminished consumer confidence amidst a real estate crisis. Leahy emphasizes China's need to balance global competition with domestic priorities.
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China's Economic Goals
- Xi Jinping aims to double China's per capita income by 2035.
- This goal is linked to surpassing the U.S. as the world's largest economy.
Post-COVID Economic Challenges
- Xi Jinping's economic playbook involves investing in infrastructure and industry, particularly high-tech.
- However, this strategy has been less effective post-COVID, partly due to a property market collapse.
Shifting Economic Narrative
- Despite economic struggles, Xi Jinping maintained a positive narrative about China's economy.
- However, this narrative started to crumble as negative economic data emerged, threatening his 2035 GDP target.