China Surprises As Key Data Shows Resilience Amid Slowdown
The Chinese economy exhibited further signs of moderation in October, but data out Monday was considerably better than expected.
Retail sales rose 4.9% YoY last month (figure below), far quicker than the 3.7% economists expected and above the highest estimate. It was the second consecutive monthly beat.
The relatively upbeat read on consumption comes as Beijing grapples with the worst COVID outbreak since the onset of the pandemic. China is the world's last major "COVID zero" holdout, and many
Chinese leaders, policy makers, and economists enjoy no sympathy from me. They’re positioned to keep all the “spinning plates” spinning because each plate has persons responsible to keep it so.
They can afford to do this because every day of every year since the 1990s the United States and Europe have been sending shipping containers full of money to China in exchange for lowering the costs of our products.
In the 1970s Nixon foresaw the inevitable rise of the Chinese and courted them, offering a hand of partnership. But the proposition of partnership with the Chinese ages from the US perspective. They can afford to push us aside because we are running out of people to meet the challenge of competing with them. We are aging, looking more like central European countries. And very soon they’ll possess more wealth than the US.
Furthermore, because they have so many people becoming educated and successful in recent years, they now aspire to expand their military (and hubris) and become a dominant and threatening military power. They clearly resent the utter dominance of the US since WWII.
The space economy is the only place where I can foresee the US may find higher ground. But they’re certainly moving in the same direction.