The continuing decline of China's economy - what are the implications ?

[DrBeer]

Pretty soon we'll also see a response to the “China is self-sufficient and produces everything internally” narrative
As it turns out the “world's factory” is dependent on so many external suppliers when it comes to real high tech...


The US has ordered Taiwanese company TSMC to stop supplying advanced chips to China from Monday. The chipsin question are those used in AI applications (Reuters).
https://www.reuters.com/technology/us-ordered-tsmc-halt-shipments-china-chips-used-ai-applications-source-says-2024-11-10/
According to the source, the U.S. Department of Commerce sent a letter to TSMC. It says it will impose export restrictions on certain complex chips with a process technology of 7 nanometers or more, intended for China, which are used in artificial intelligence (AI) gas pedals and graphics processing units (GPUs).
The U.S. order, which is being reported for the first time, comes just weeks after TSMC notified the Commerce Department that one of its chips was found in a Huawei AI processor. Research firm Tech Insight reportedly took the product apart, viying the TSMC chip and an apparent export control violation.
Reuters writes that Huawei is on the U.S. trade restriction list, which requires suppliers to obtain licenses for any of the company's goods or technology. As such, any license that could help Huawei's AI efforts will likely be rejected.
According to a Reuters source, as a result of the letter, TSMC has notified affected customers to suspend chip shipments starting Monday. The U.S. Commerce Department declined to comment....

[RockBell]

I think the decline in China's economy will significantly affect the global economy and china's social economy and landscape leading to a major risks in business,market and major areas too.
Imagine the decline in the China economy has caused a high Chance of unemployment in the society and people unable to meet up to standards.This continuous decline is what I don't get because it's becoming so alarming and fustrating and neighbouring countries are being affected by this effects as well but with time I believe they can scale through this a whole lot if they can make some certain adjustment in the economy or need help from neighbouring countries too.

China use to have one of the best economy and now things are looking different and if the economy of China is affected then every other things in the global economy will be affected because most of things that are produced from China will be reduced and their will be massive lost when the demand is low and since other people's economy is already affected then they are finding it very hard to increase demand because if their are no people to buy.

And the issue of unemployment is eating up everywhere and with the kind of population that China have they need to put everyone into consideration and that is why even the birth rate was increasing they looked for a solution to actually reduce the way the birth rate is actually increasing because if it continues that were is the job to give to the future ones that are coming.

And the reason why other countries will be affected is that China is one of the biggest countries with the largest economy even when it comes to technology and other things they are leading and they do business with a lot of countries and that is the main reason that it will affect the world economy.

[DrBeer]

I think the decline in China's economy will significantly affect the global economy and china's social economy and landscape leading to a major risks in business,market and major areas too.
Imagine the decline in the China economy has caused a high Chance of unemployment in the society and people unable to meet up to standards.This continuous decline is what I don't get because it's becoming so alarming and fustrating and neighbouring countries are being affected by this effects as well but with time I believe they can scale through this a whole lot if they can make some certain adjustment in the economy or need help from neighbouring countries too.

China use to have one of the best economy and now things are looking different and if the economy of China is affected then every other things in the global economy will be affected because most of things that are produced from China will be reduced and their will be massive lost when the demand is low and since other people's economy is already affected then they are finding it very hard to increase demand because if their are no people to buy.

And the issue of unemployment is eating up everywhere and with the kind of population that China have they need to put everyone into consideration and that is why even the birth rate was increasing they looked for a solution to actually reduce the way the birth rate is actually increasing because if it continues that were is the job to give to the future ones that are coming.

And the reason why other countries will be affected is that China is one of the biggest countries with the largest economy even when it comes to technology and other things they are leading and they do business with a lot of countries and that is the main reason that it will affect the world economy.

It is more correct to say that it was an economy perfectly integrated into the Western market and relations with the global West. The West provided investment, technology, markets, that is, everything that was necessary for the development of the Chinese economy. We should not forget that China's economy is purely export-oriented, which means that it depends on external markets for consumption, as well as on investment and technology, which are the three areas that China itself cannot organize or develop.

As for the fact that “other countries will suffer” is debatable. Let me explain:
Those countries that are caught on the hook of “Chinese investment” will suffer, study the example of Sri Lanka to understand what it is and what problems it creates.
Other countries will not suffer, moreover, it may even be beneficial - to compensate for the reduced supply of goods produced in China, the local market will develop its own production.

[danadc]

The Chinese economy is very opportunistic, they saw the opportunity to grow in a pandemic and they did it Many said that Covid19 came out in China, they got sick first and then released it to the world, and that they took advantage of all the Opportunities that the market left them, This is speculation.

Obviously the government can do it , now that they are in trouble? For them , it is preferable to Start wars rather than be bankrupt, so the conflict with Taiwan could escalate into an unprecedented 3rd World War For me, that is the scenario closest to reality.

[WillyAp]

According to an opinion released by Bloomberg, China is not so much in Debt.

No, China Doesn’t Really Have a Debt Crisis
Beijing is gun-shy about fiscal stimulus due to concerns more debt will build up. This thinking is muddled.

followed by:

It’s also ludicrous to judge whether a debt crisis is looming based purely on simple accounting metrics such as debt-to-GDP ratios, which reflect what happened in the past. Instead, Beijing should think about what to do with the asset side of its balance sheet in the future.
Unlike Western nations that borrowed to fund recurrent government expenditures — think of the Greek pension system in the 2000s — the Chinese government has a different calculus.

https://www.bloomberg.com/opinion/articles/2024-11-20/china-shouldn-t-worry-about-a-debt-crisis-given-deflation
No paywall: https://archive.ph/Y9WNT

Judging from the outside is always tricky.
Aren't here any Chinese Citizens who could set the record straight?

[DrBeer]

The Chinese economy is very opportunistic, they saw the opportunity to grow in a pandemic and they did it Many said that Covid19 came out in China, they got sick first and then released it to the world, and that they took advantage of all the Opportunities that the market left them, This is speculation.

Obviously the government can do it , now that they are in trouble? For them , it is preferable to Start wars rather than be bankrupt, so the conflict with Taiwan could escalate into an unprecedented 3rd World War For me, that is the scenario closest to reality.

To start a war is always a “good method” to distract the population from the real problems, the problems of the authorities, to “appoint” the enemies and the guilty, and to force everyone to live by very strict, totalitarian rules. Again - rulers do not fight, ordinary people will die. And for totalitarian rulers, admitting their mistakes is like death. So, yes, in today's situation, the Chinese government will further inflame the situation in order to “show” the Chinese population - see what enemies are around, that's why everything is so bad for us....

[DrBeer]

“Fear the U.S. more than it loves money. Putin's ally refused to work with Russian payments”
China has decided to prepare for Trump's arrival, and has started following US instructions.  Several banks in China have stopped accepting yuan payments from Russia over fears of secondary sanctionsfrom the US
Russian companies are facing mass blocking of accounts in Chinese banks such as Bank of China and Chouzhou Commercial. UnionPay in Russia is virtually paralyzed and holders of funds in this system cannot access funds.

It is the right decision - a submissive raw material appendage will not go anywhere, but it is necessary to follow the US lead, otherwise China's economy will not be saved...

[Webetcoins]

I don't know if it was mentioned here, but Trump has talked about how he will increase Chinese tariff another %10 for not stopping the drug trade they have. They just send all their drugs to Mexico (mainly fentanyl) and then spread to USA from there, and not like they are making much money neither, most do drug trade because they want to get rich, like Colombians did, and how Mexico is still doing, China only aims to ruin USA by spreading more fentanyl into the market and making people addicted, if there are none in the market, then there won't be anyone who is addicted to it, since there is none.

In the end, Trump has talked about putting more and more tariffs until China figures out a way to stop this, if they can't, then tariffs will continue to go up, ruining all Chinese companies.

This is the kind of strong arm stuff that people were talking about when they wanted to elect Trump, we have no clue if this will do good or bad, will it work like intended or not, but certainly something to watch out for. We could have plenty of Chinese products become much more expensive, or not even imported, and that may have some consequences for the Chinese, I am sure they will try their hardest to stop them.

[Fortify]

As we know and observe - in recent years, China's economy has not only experienced “difficult times” but has also gone from growth to decline. The reasons are many - from COVID19, which hit the economy hard, to the changing relationship with the West, resulting in the loss of markets, investment, access to technology and other things that China is heavily dependent on.
Destabilization in China is guaranteed to create a lot of economic difficulties in neighboring countries, as well as on the geopolitical map of the world, where everything is not good.

What happens next ?  I will assume this scenario:

1. Increased withdrawal of Western investment and Western industries from China (related primarily to political conjuncture)
(We are roughly here now)
2. Attempts of the Chinese government to “spare no expense” to keep the economy afloat, which will lead to the burnout of strategic reserves, and will allow to “come to the edge of the abyss”, where without huge Western infusions of money into the Chinese economy the problem will not be solved.
3. strict administrative measures and transfer of the economy under the control of the state, with the curtailment of economic freedoms, which will negatively affect both the efficiency and quality of the economy.

The question is what's next? Realization and acceptance of the problem and correction of mistakes, ceasing to pretend to be the “second pole of the world”, establishment of relations with the West, refusal from dubious “friends”, reintegration into the world economy ? Or ? There may be a path of totalitarianism and isolation, militarization of politics to distract the population from pressing problems and getting the right to total control over people and management of private business ...

Question - what options for the development of events can you assume in connection with this situation?

Just like the global financial crisis hit America, Europe and related economies the hardest - perhaps China has been sitting in a comfortable bubble for a very long time and it is in the process of bursting. They are currently trying to control the deflation so it doesn't explode, but these things can often get out of hand and beyond the control of the government - especially one that is so opaque. When all Chinese officials are just trying to protect their own little fiefdoms, trying to limit information flow or downright manipulating data in case it gets them in trouble, then it's hard to trust any statistics generated internally in such a country. It's hard enough to control and reverse a crisis in a relatively open country, but the Chinese economy may go bad a lot more quickly than we expect, it is on the turn right now after many years of high growth.

[AmoreJaz]

“Fear the U.S. more than it loves money. Putin's ally refused to work with Russian payments”
China has decided to prepare for Trump's arrival, and has started following US instructions.  Several banks in China have stopped accepting yuan payments from Russia over fears of secondary sanctionsfrom the US
Russian companies are facing mass blocking of accounts in Chinese banks such as Bank of China and Chouzhou Commercial. UnionPay in Russia is virtually paralyzed and holders of funds in this system cannot access funds.

It is the right decision - a submissive raw material appendage will not go anywhere, but it is necessary to follow the US lead, otherwise China's economy will not be saved...

For sure, they know the implications if they will go against to who is in the position right now. Hence, they are slowly lifting some actions that will favour the current US President. It is all about politics sometimes. They need to follow what's the current situation, else, there will be repercussions.

The Chinese economy is very opportunistic, they saw the opportunity to grow in a pandemic and they did it Many said that Covid19 came out in China, they got sick first and then released it to the world, and that they took advantage of all the Opportunities that the market left them, This is speculation.

Obviously the government can do it , now that they are in trouble? For them , it is preferable to Start wars rather than be bankrupt, so the conflict with Taiwan could escalate into an unprecedented 3rd World War For me, that is the scenario closest to reality.

We can't say that for a hard fact, most are just speculations on this matter. It is like a conspiracy theory that we want to believe in. However, I think we are already in this digital age where information can spread fast especially with the numerous social media platforms that we have. It is not difficult to disseminate info these days.

[WillyAp]

I don't know if it was mentioned here, but Trump has talked about how he will increase Chinese tariff another %10 for not stopping the drug trade they have. They just send all their drugs to Mexico (mainly fentanyl) and then spread to USA from there, and not like they are making much money neither, most do drug trade because they want to get rich, like Colombians did, and how Mexico is still doing, China only aims to ruin USA by spreading more fentanyl into the market and making people addicted, if there are none in the market, then there won't be anyone who is addicted to it, since there is none.

Making them addicted?
The human being, without any willpower, an animal easy to lead?

[DrBeer]

“Fear the U.S. more than it loves money. Putin's ally refused to work with Russian payments”
China has decided to prepare for Trump's arrival, and has started following US instructions.  Several banks in China have stopped accepting yuan payments from Russia over fears of secondary sanctionsfrom the US
Russian companies are facing mass blocking of accounts in Chinese banks such as Bank of China and Chouzhou Commercial. UnionPay in Russia is virtually paralyzed and holders of funds in this system cannot access funds.

It is the right decision - a submissive raw material appendage will not go anywhere, but it is necessary to follow the US lead, otherwise China's economy will not be saved...

For sure, they know the implications if they will go against to who is in the position right now. Hence, they are slowly lifting some actions that will favour the current US President. It is all about politics sometimes. They need to follow what's the current situation, else, there will be repercussions.

Yeah, that's right... China has already tried to play the “second pole of the world”, tried to “puff up its cheeks” and “set conditions”, as a result - we know what is happening to China's economy now. “Paper Tiger*”, I think that's the Chinese way to describe China's current situation.

* an old Chinese metaphor used in modern Chinese to refer to a person or group of people who look powerful, fierce, but are in fact empty and powerless.

[philipma1957]

TRUMP will effort to fuck every country in the world 🌍 with the idea America 🇺🇸 first.

[kotajikikox]

The Chinese economy is very opportunistic, they saw the opportunity to grow in a pandemic and they did it Many said that Covid19 came out in China, they got sick first and then released it to the world, and that they took advantage of all the Opportunities that the market left them, This is speculation.

That is quite a speculation. Will any country be so willing to put their citizens and the entire world at harm for an opportunity to earn and whatnot? It is not like China escaped the consequences of COVID19. They got affected too. Not to mention that they are the ones whose image got severely destroyed. Chinese citizens got extreme discrimination and racism directed towards them because of the virus. No one was allowing them in any country and even after the pandemic has gone down a bit, everyone was still generalizing the Chinese citizens of carrying the virus.

Everyone's economic state suffered after the pandemic and I don't know if it is worth to do that for anything at all.

[danadc]

To start a war is always a “good method” to distract the population from the real problems, the problems of the authorities, to “appoint” the enemies and the guilty, and to force everyone to live by very strict, totalitarian rules. Again - rulers do not fight, ordinary people will die. And for totalitarian rulers, admitting their mistakes is like death. So, yes, in today's situation, the Chinese government will further inflame the situation in order to “show” the Chinese population - see what enemies are around, that's why everything is so bad for us....

Yes, it is very bad for all humanity but I can't get it out of my head that in 2019 and 2020 there was not going to be a war, they had nothing to do, it was very profitable to launch a virus and contaminate CHINA first, then the other countries and then buy on the stock market when everything was down, and when things got better in the world everything was sold, and that's why some countries were able to recover their economy and for me China was one of those beneficiary countries, so if that can be done, a war costs nothing to light the candle, for me it is already lit, only that the USA can put it out.

[DrBeer]

To start a war is always a “good method” to distract the population from the real problems, the problems of the authorities, to “appoint” the enemies and the guilty, and to force everyone to live by very strict, totalitarian rules. Again - rulers do not fight, ordinary people will die. And for totalitarian rulers, admitting their mistakes is like death. So, yes, in today's situation, the Chinese government will further inflame the situation in order to “show” the Chinese population - see what enemies are around, that's why everything is so bad for us....

Yes, it is very bad for all humanity but I can't get it out of my head that in 2019 and 2020 there was not going to be a war, they had nothing to do, it was very profitable to launch a virus and contaminate CHINA first, then the other countries and then buy on the stock market when everything was down, and when things got better in the world everything was sold, and that's why some countries were able to recover their economy and for me China was one of those beneficiary countries, so if that can be done, a war costs nothing to light the candle, for me it is already lit, only that the USA can put it out.

In 2019-2020 the war was already underway. Today's war in Europe was started by russia in 2014.... Whether the virus leak was intentional or not - it is false to say now, but if it was intentional - the goal was achieved - a huge blow to major economies and developed countries, where states had to make very difficult decisions, “printing money” to provide social assistance, as well as assistance to private business... With some probability, all this can be regarded as links of one chain - weakening of the world economy (19-20 years), reorientation of many countries (first of all developed, western countries) on internal problems, at this moment (20-21 years) starts harsh rhetoric from the side of russia (this “guinea pig” of china), which reveled in impunity for the war started in 2014, “the west - we order you to do what we say”, the next step was to be the full occupation of Ukraine, the withdrawal of Russian troops to the EU borders with further threats, provided the continuation of soft or cowardly policy of the west. Then should have been the takeover of Taiwan, with the complete impotence of the western world, which they have shown until 2022.... But Ukraine has become a “bone” that is stuck “in Russia's throat” and is leading to its collapse, as well as the growing problems of China, because of the impossibility to realize its plans.

[danadc]

The Chinese economy is very opportunistic, they saw the opportunity to grow in a pandemic and they did it Many said that Covid19 came out in China, they got sick first and then released it to the world, and that they took advantage of all the Opportunities that the market left them, This is speculation.

That is quite a speculation. Will any country be so willing to put their citizens and the entire world at harm for an opportunity to earn and whatnot? It is not like China escaped the consequences of COVID19. They got affected too. Not to mention that they are the ones whose image got severely destroyed. Chinese citizens got extreme discrimination and racism directed towards them because of the virus. No one was allowing them in any country and even after the pandemic has gone down a bit, everyone was still generalizing the Chinese citizens of carrying the virus.

Everyone's economic state suffered after the pandemic and I don't know if it is worth to do that for anything at all.

but how to be sure? that is a reality that few dare to say, some do not say it because they believe they are against the country or its citizens, but it is not like that, the world is not as you think it is, the world is and has many dark things, for some reason it is said that one should not even trust our own shadow because it can betray you, I am not a conspiracy theorist, but I can consider many speculations, or rather, consider possible things that Could have been like that, we cannot cover our eyes, we must be realistic, any such thing could have Happened.

[DrBeer]

As we know, some countries, BRICS members and “heroic fighters against the dollar”, abandoned the dollar and started to form state reserves in yuan. I know at least 2 such countries.
So now we are on the threshold of a very interesting moment! China is planning to devalue its currency... It's due to economic problems and impending duties on Chinese goods shipped to the U.S. market. Well, it seems that this step can help, though not globally, but at least for a while. But there is a nuance - without guaranteeing the salvation of the Chinese collapsing economy, this step is guaranteed to hit the economy of the unfortunate “Chinese obedient slaves”, who have formed their gold reserves not in normal currencies (dollar/euro) but in yuan! I wonder how they will react if their state reserves fall overnight by 10-20% ?

[WillyAp]

But there is a nuance - without guaranteeing the salvation of the Chinese collapsing economy, this step is guaranteed to hit the economy of the unfortunate “Chinese obedient slaves”, who have formed their gold reserves not in normal currencies (dollar/euro) but in yuan! I wonder how they will react if their state reserves fall overnight by 10-20% ?

They'll weight its pro and contras.
Do those countries have a credit running with China or what made them exchange their Gold into Yuan?
Most countries being overly adventurous with the Chinese or the US for that matter, learn pretty fast.

[Swordsoffreedom]

I don't know what challenges China's economy is facing and how bad their economic situation is because I'm not Chinese. But as far as I know, in just 10 short years, their GDP has increased from 7 trillion to 17 trillion. They have become the 2nd largest economy in the world and account for 86% of Asia's economic output. I wonder if any country has achieved such remarkable growth in the past decade.

Yes, they may be facing certain difficulties and have not overcome them yet, but that is not too worrying because that is the general situation of the world after the covid pandemic. There is nothing to worry about when the economy slows down slightly after 10 years of continuous growth.