"We all need to pay attention as we brace for the second China shock. The first, which followed China's accession to the WTO in 2001, was about China's integration into the global trading system, with huge consequences for global labour and resource markets and the harm experienced by many communities around the world as firms and jobs were lost. The second one is China's attempt to lead and dominate advanced technologies, such as electric vehicles, batteries, semiconductors, biotechnology, robotics and AI, via state-directed industrial policy."
"Yet this cheerful rhetoric contrasts with the prescriptive policy measures the government is proposing to implement. These include even easier monetary policy, higher fiscal deficits, real estate stabilisation measures and increased social spending to deal with what it acknowledges is a more complex external environment. Such complexities include overproduction and weak demand at home, as well as ongoing risks to financial stability from the beleaguered real estate sector."
Emmanuel Macron returned from China without securing Chinese help to stop the Ukraine war or curb China’s large trade surplus. Beijing prioritized domestic planning, including the upcoming politburo meeting, the Central Economic Work Conference and the new 15th five-year plan. China aims to lead in advanced technologies—electric vehicles, batteries, semiconductors, biotechnology, robotics and AI—through extensive state-directed industrial policy. Policy responses include easier monetary policy, larger fiscal deficits, real estate stabilisation and increased social spending to address a complex environment of overproduction, weak domestic demand and financial risks tied to the troubled real estate sector.
Read at www.theguardian.com
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