China clings to an outdated economic model despite international warnings

In a published opinion piece Foreign Affairs, Daniel H. Rosen And Logan Wright Addressing the stagnant Chinese economy, “China has not grown in the last two years”. While the immediate reasons for this slowdown are known, the slowdown in property construction and restrictions are among the “Zero covid“It has depressed private sector investment, Rosen And Right They insist that The problems are systemic.

Focus of companies and analysts in Chinaas well as focusing on the programs of governments and corporations around the world Beijing To stabilize the country's economy. Between 2010 and 2019, annual growth GDP of China 7.7% on average, but today, the political reforms needed to sustain three or four percent growth pose a considerable challenge to the regime-led government. Xi Jinping.

Rosen And Right They are recognized experts on the Chinese economy. In their analysis, they point out the implications of current policies and expectations National People's Congress, the most important political event on the country's calendar. However, following its decision on March 11, the announced policies did not announce a change in direction. “(Congress) decisions will increase rather than alleviate the legitimate concerns of foreign countries“The authors warn. Faced with an economic climate that required structural reforms, they emphasize that the leaders of the Communist regime chose a course that deepened the country's economic dependence on external sources of demand.

China's export- and investment-led growth strategy has come under criticism. “Suggests that Beijing is not implementing the kind of fiscal policies that promote domestic growth.”“, indicate the authors of the article Foreign Affairs. On the other hand they blame Beijing Directing financial and credit resources towards local investments rather than direct households to increase their consumption. A lack of support for domestic consumption coupled with export-friendly policies worsens the country's trade surplus. China and increases the external deficit, threatening competition and the viability of firms and workers in other countries.

Besides, Rosen And Right Address the concern that China It continues to expand its production capacity to boost exports despite warnings from various governments and economists. “Beijing has shown no signs of heeding these demands from Western governments.“, they affirm after analyzing the policies announced in the last Congress Chinese Communist Party. The country's industrial policies — emphasizing sectors such as electric vehicles, batteries and solar cells — are not only questionable domestically, but threaten to undercut competitors in developed and developing economies.

The international response to these policies is diverse, including research Anti-garbage Against Chinese exports for calls China Consider the impact on your export volume. According to the authors and members Think tank Rhodium groupTrade conflict resulting from current policies China Not only is this affecting the country's relations with advanced economies, it is also beginning to affect its relations with other members. BrixThe generating block Russia, India, Brazil And South Africa. Without significant domestic structural reforms, the situation is telling. China is headed for deeper trade conflicts with global implications.

In conclusion, Rosen And Right argue that Beijing There seems to be a lack not only of the capacity but also of the ability to effectively address domestic economic disparities. This reluctance to reform policies in favor of trade surpluses underlies the current economic and trade conflict with the rest of the world. Highlighting the need for analysis China Enact substantive reforms to avoid an irreversible split in global trade and protect the country's economic health.

“Chinese officials often say Beijing is not deliberately running a trade surplus. Whether intentional or not, China's trade imbalances are not sustainable for the rest of the world, and China should not be surprised if foreign governments begin to respond more aggressively.” warns analysts. They conclude: “Few viable policy options and a reluctant negotiator in Beijing, particularly Western governments, would consider stricter restrictions on Chinese trade. That shock may require China to get serious about structural reforms, both for its own economic health and in hopes of avoiding an irreversible breakdown in global trade.”.