The Intelligence Squared Economic Outlook China Special, with Keyu Jin
May 26, 2024
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Keyu Jin, an Associate Professor at the London School of Economics and author of "The New China Playbook," dives into the complexities of China's economy and its global implications. She discusses the slowing growth rates, high youth unemployment, and the turmoil in the domestic property market. Jin explores the potential repercussions of economic vulnerability on U.S.-China relations and addresses the rapid advancements in AI tech as a response to restrictions. Her insights challenge misconceptions about China's unique development model and the evolving mindset of its youth, emphasizing innovation amid change.
China's economic challenges include slow growth, high youth unemployment, and a turbulent property market, posing significant obstacles for President Xi Jinping.
The US-China tension revolves around technological competition, influencing domestic innovations, investment trends, and global reorganization due to restrictions on Chinese technology.
China's new consumer generation shows a shift towards consumption, entrepreneurship, and global openness, signaling potential for reshaping economic and social landscapes.
China's recent economic indicators and regulatory adjustments suggest stabilized growth, attracting global capital potentially, provided with pragmatic policies and regional stability to encourage investments.
Chinese electric vehicles pose a formidable competition in global markets with quality products at various price points threatening established brands, reflecting China's emphasis on innovation and market dynamics.
Deep dives
China's Economic Growth in Asia
China, India, and Indonesia are the fastest-growing countries in Asia, contributing to more than half of the global economic growth. However, concerns arise from a shift in global trade patterns due to US-China relations impacting global reorganization and rising protectionism.
Technological Competition Between US and China
The tension between the US and China revolves around technological competition, with the race for AI supremacy being a significant factor. Restrictions on Chinese technology have led to rapid domestic technological advancements and a surge in innovation and investment in critical sectors.
Generational Shifts and China's Development
China's new generation displays a shift towards consumption, entrepreneurship, and global openness, diverging from traditional saving habits. Despite challenges like youth unemployment, this generation holds potential to reshape economic and social landscapes, balancing economic growth with social equity and harmony.
Investment Outlook and Global Capital in China
Recent positive economic indicators and regulatory shifts in China show signs of stabilizing growth, potentially attracting global capital back. While uncertainties in US-China tensions exist, pragmatic policies and stability can encourage investment, acknowledging Asia's pivotal role in global growth.
Effect of Trade War and Consumer Preferences in China
The trade war between the US and China may impact both nations, with studies indicating that Americans bear the brunt of tariffs. Local preferences in China towards international products due to perceived quality challenges highlight potential consumer shifts amidst trade tensions.
Future Prospects and Challenges for China
China's future hinges on navigating economic challenges, generational dynamics, and geopolitical uncertainties. Balancing growth agendas, social welfare, and technological advancements remains critical for China's sustained economic success.
Audience Interaction on Trade War Impacts
In an audience query, the discussion shifts to the impact of the trade war on China and the US. Perspectives vary on which nation bears the brunt of tariffs, and consumer preferences in China emphasize quality perceptions influencing buying choices amidst trade tensions.
Chinese EVs' High Quality and Global Competition Threat
Chinese electric vehicles present a significant threat to global competition due to their high quality across various price points, ranging from $10,000 to $140,000, directly competing with established brands like Tesla. The quality of Chinese EVs results from substantial investments in innovation, particularly in the electric vehicle and solar panel sectors. This shift signifies China's move towards offering quality products over just low prices, reshaping the global market dynamics.
China's Investments in Africa and Geopolitical Strategy
China's investments in Africa reflect both economic and strategic interests, emphasizing infrastructure development in the region. While concerns about rising debt levels have surfaced, attributing these debts solely to China might overlook the broader debt distribution among developing countries. China's focus on Africa also aligns with its interest in cultivating geopolitical partnerships and expanding its global influence through collaborative projects and investments, illustrating a multifaceted approach to economic engagement.
China’s economic power has been growing for decades. The capitalist reforms of Deng Xiaoping quickly transformed China into the world’s fastest-growing major economy, with growth rates averaging 10% annually. But in recent years the so-called China miracle has begun to slow down. The Covid-19 pandemic and the default of property giant Evergrande (the world’s most indebted property developer) are among the factors that have economists and politicians around the world asking: Is China’s economy in big trouble?
As we enter 2024 President Xi Jinping faces some formidable challenges: slow growth, high youth unemployment and a domestic property market in turmoil.
In May 2024 renowned economist Keyu Jin came to Intelligence Squared to help us all make sense of the problems China faces. In conversation with the BBC's Jonny Dymond at London's Asia House, she explained how the success or failure of China's economy will have profound consequences for the rest of the world.
Some argue that a more vulnerable China will seek better relations with the United States and the West. Others say economic weakness could make the country more aggressive and therefore more likely to invade Taiwan. Either way it has never been more important for us to understand the Chinese economy.
This recording is part of The Intelligence Squared Economic Outlook series of events made in partnership with Guinness Global Investors, an independent British fund manager that helps both individuals and institutions harness the future drivers of growth to achieve their investment goals.
To find out more visit: https://www.guinnessgi.com/
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