The Journal. Why China Is Risking a Trade War
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Aug 28, 2024 Chinese leader Xi Jinping is doubling down on manufacturing, raising concerns of a potential trade war. The focus on low-cost goods threatens businesses globally and highlights the strain on U.S. companies. Amid economic challenges like rising youth unemployment and a struggling housing market, China's shift toward state-led exports may have dire consequences. Escalating trade tensions, including Canada’s tariffs on Chinese electric vehicles, further complicate the geopolitical landscape and signal a crucial moment for global trade dynamics.
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Cubic PV Example
- Cubic PV, a U.S. solar wafer company, halted its $1.4 billion Texas plant project.
- This was due to China's increased silicon wafer output, which lowered prices by 70%.
Trade War Concerns
- China's manufacturing-centric policy is raising concerns about a global trade war.
- Overcapacity, driven by government subsidies, results in artificially low prices.
China's Economic Crossroads
- China faces economic downturn and high youth unemployment, prompting a policy crossroads.
- Advisors suggested boosting domestic consumption, but Xi Jinping doubled down on manufacturing.