WSJ video on persistent deflation in China and how it would affect the Global Economy
This next video is from Peter Zeihan, who is best described as a "China Pessimist". However, he does provide a good summary of the problems China faces.
0:30 How the US traded global security to the world, allowing the world to trade peacefully and grow economically, in exchange for their alliance against the communist world. That was "globalisation" (as Peter Zeihan understood/explains it).
1:18 How globalisation is "misunderstood". The US saw it as a security deal, and the world saw it as an economic deal
1:36 The transition from an agrarian/agricultural society to a urban/Industrialised society, the decline of childbearing/childrearing (or the transition of children from being free labour in a farm, to a financial burden in the city.)
2:05 The shortage of working age adults.
2:27 The Chinese Urbanisation Experience
4:52 A Brief History of Post-Mao China
5:55 Enter Xi Jinping
7:26 "Reuniting" Taiwan (by force).
9:13 Best case scenario - Capturing Taiwan "bloodlessly". Still bad for China.
[Peter Zeihan provides an interesting perspective on "Globalisation", the role of the US, and the benefits to the world. Which also means that China in trying to surpass the US, is blind or indifferent to the role that the sole Superpower has undertaken, and has shown no interest in providing the security that would allow globalisation to take place.
Zeihan's description of Xi Jinping's ascendance and consolidation of power is also interesting.
The next video: Economist's Editor-in-Chief Zanny Minton Beddoes
China's Growth Target (ambitious? unrealistic?) State of the economy. Risks?
0:06 China's economy is not in good shape - property bust, slowing growth, deflation, loss of confidence (consumer?), Foreign investments have collapsed.
0:35 "Ambitious Growth Target", but no signs of how it would be achieved. No Stimulus?
1:06 China facing Japan-style "lost decade"?
1:16 Xi Jinping has concentrate power around himself.
1:47 Xi asserting a lot of control. Ambitious targets. Not clear how this would be achieved. Economy weak, consumer confidence low.
2:18 China has always (in the past) been technocratically competent in terms of economic policy.
3:11 That has changed - high levels of youth unemployment. Disillusionment. Sense of loss of confidence. (Pessimism).
3:36 Focus on National Security.
3:49 Xi is not focused on or interested in Economics. Doesn't believe in stimulus. Economically illiterate.
4:26 All of this against the backdrop of tension between China and US.
5:38 China has become "Uninvestable".
Finally, CNA asks an academic what direction China's "Two Session" has provided in terms of how China will promote grown in the near future.
China's "Two Sessions" - long on policy, short on details:
So... no concrete details.
These videos provide a sampling of the range of "China Pessimism" that one might encounter. China is facing a lot of challenges - the collapse of the real estate sector, high youth unemployment, turmoil in the leadership, trade spats, the failing BRI, high debts, persistent deflation, an ageing and falling population and so on...
So the question is, "can China continue to grow, and how?"
China's growth over the last 40 years has been based on leveraging the huge population, and applying them to manufacturing, being the factory of the world. But in the 40 years since, those factory workers are now 40 years older, and facing retirement with very little pension and social support. And the population is shrinking. And Xi does not seem to have an answer to any of the problems.
CNA reports that "China's 5% growth target... achievable, says state planner"
So... long on policy, high on "irrational exuberance" (a.k.a. "state-mandated optimism"), and short on concrete, realistic details.
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