China is an economic miracle. However, it needs far more growth to provide Western standards of living to a broader population across more of the country. The inevitable decline in population will be a drag on domestic demand. It's inevitable because the trends are baked in twenty years hence.
Sinophiles generally have a deep-seated belief in Beijing's ability to manage growth and navigate through downturns. The heavy investment/export phase is the easiest phase. It's a well-worn path followed by many industrializing countries. It's also generally easier for autocratic or oligarchic societies to implement. The first step is for the government to encourage investment and modern management techniques by liberalizing aspects of the economy in order to kick-start growth. Then the government continually reinforces a strong feedback loop between domestic profits and capital intensity (build-up). The government retains control of certain sectors and directly/indirectly subsidizes producers and capital investment at the expense of domestic consumption.
China is now facing its first great post-industrialization challenge. Economic theory suggests a strong central government cannot steer the economy through the next phase. The theory supports the view that the economy has to become more democratized. That's the sticky point because further liberalizing the economy would ultimately conflict with Beijing's power and authority.
China is a great economic story. One might even believe that China's unique form of economic development is truly extraordinary. However, I can tell you the unrelenting growth could not continue indefinitely without a bump. China has hit a rocky patch. Beijing has very difficult choices to make.
I'm not sure I follow the U.S. interest rate conspiracy. If anything, China earns a greater return on U.S. If you are saying the Fed's money printing in 2020-2022 was good for China, I probably would agree with that. I would not say it was good for the U.S. to continue with a loose monetary policy.
Generally, trading relations are mutually beneficial. (There are instances where smaller countries trade for goods and commodities that they can't produce in scale and absolutely need.) China needs U.S. demand to run its economy. For structural reasons noted above, they have been unsuccessful in stimulating domestic demand. For obvious reasons, people mistakenly get lost in the banker/borrow analogy. It's far more complicated.
Thank you for the fair and productive response rather than resorting to personal attacks.
My premise is this, and it is shared by many Asians who grew up here in Canada and the US.
The US raised interest rates to screw over China along with the rest of the world. The playbook for the US is as follows. Raise their interest rates, foreign money will flow into the US because its better investment. The exchange rate will be bad for businesses in China because it means they required to pay more local currency for the same amount of USD.
What this will result is that the local business can't keep up their operations, and will go bankrupt. When that happens, Wall Street will buy up those businesses, and properties, and land. Because now they will be paying less USD to get the same local currency.
Wall Street will buy up business in China. Then US will decrease their interest rate make exchange rate more favourable. And allow China business to recover. When that happens, their purchase of those China businesses will soar in value, and they will sell it back out for profit. Or they will keep owning them and milk the dividends. They did this in 2008 to help with Leiman bro bankruptcy. They tried to do this in 1998 or 1999 HK stock market, altho that was more Soros.
And they tried to tank China economy again in 2019 by inciting HK riot. And once again, in 2020 when covid hit. However, China has been able to defend against this playbook. By buying US money and debts. So when US increased their interest rate China used their stash of USD instead of going through exchange rate. So this just became a matter of who can last longer, US tanking their own economy by increasing the interest rate or China running out of USD first.
But this recent set of events has already resulted in a lot of German businesses going bankrupt as a bonus. The main target is China because the US cannot influence their economy unlike everyone else’s. They want stuff like china's high speed rail, seaports to go bankrupt. But China dumped massive amount of money to ensure that won't happen. German government on the otherhand, isn't going to bail out their own shit. This is what they did to Japan when Japan was second in GDP and threatening to get close to US GDP maybe like 20 years ago?
Even all the foreign interferenc rhetoric by Canada is driven primarily from a US centric POV. China doesn't care enough about Canada to interfere with its election. There are Chinese spies here, sure, but have enough influence to impact election? China is far from that. China is more like... work with me and I guarantee you will make money. That's how Russia isn't tanking after all the sanctions. Their supermarkets are now filled with Chinese products.
Bottom line. China isn't putting all their eggs into one basket that the US can easily influence. This theory will not be seen anywhere in western media, but then again China is very much a mystery to those who have never travelled there before.
The US absolutely views China as an economic threat.
EDIT: 3 factors make the US the worlds number 1 superpower: USD, US military, and US media. So, yes, absolutely economic threat, but moreover, it's the fact that all 3 of US weapons are not working in China. They can't bankrupt China the way they did to Japan. China will never buy US weapons. And China blocks us media basically. That's why Biden has more than once said, China is the greatest enemy that US has faced because China is taking on US on all fronts. US has zero influence on China relatively speaking. And worst of all, more and more Chinese are no longer buying into that US democracy is the best system on world, unlike what the Soviet union did.
