Morning Wire
China's Economic Challenges & Global Trade Impact | Saturday Extra
Sep 9, 2023
David Goldman, the deputy editor of Asia Times and a strategic economist, provides keen insights into China's economic landscape. He discusses the country's shift from an industrial base to a high-tech economy. Goldman addresses the challenges in China's real estate market and the effects of government policies on housing. He also examines the pipeline of Chinese exports, detailing how tariffs are reshaping trade routes through nations like Vietnam and Mexico. Additionally, he highlights China's evolving global trade dynamics and its implications for industrial sectors.
11:33
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Quick takeaways
- China is transitioning from a low-skilled heavy industry to a high-tech industry economy, reducing the importance of the property sector and shifting investment to high-tech sectors.
- Contrary to perception, China has been reshuffling trade flows and exploring markets in countries like Vietnam, Mexico, Brazil, and India, making reducing dependence on China's exports challenging without substantial investments in industrial capacity.
Deep dives
China's Economic Transition and Real Estate Market
China is undergoing an economic transition, shifting from a low-skilled heavy industry to a high-tech industry economy. This transition has reduced the importance of the property sector, which previously accounted for 25% of GDP. As a result, the government has implemented measures to squeeze the property market, such as cutting off credit and imposing restrictions on home buyers. While the transition is causing disruptions and pain, there is no financial crisis in China. The government's long-term goal is to shift investment to high-tech sectors to address declining workforce and boost productivity.
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