Excuses Aside, China’s Economic Gloom Continues To Worsen
There was more disappointing economic news out of China on Tuesday. No one should be surprised.
You know the story. Or if you don't, you haven't been paying very close attention. Headed into 2023, the consensus macro narrative revolved around the notion that the Chinese economy was poised for a robust recovery coming out of "COVID zero," while the US economy was likely to decelerate or even slip into recession, possibly as soon as H1.
Suffice to say things didn't go according to plan. In fact,
As long as Xi stays in power an economic comparison is the wrong scorecard.
Their most valuable export to us may be Deflation. Their recent “stimulus” strategy looks like continued devaluation of their currency.
Maybe the “Peter Principle” has overtaken Xi.
Foreign Affairs recently published an article detailing why the Chinese economy may be in far more dire straits than what the conventional wisdom and analysis suggests. It provides a detailed look at the impact of an Authoritarian regime (especially one entering its 3rd term) on domestic demand, business investment (both private and state-owned), among other things (links below). In addition to the ongoing demographic challenges China is facing – an aging population and the unintended consequences of the One Child policy, China may have some significant headwinds to economic growth in the coming years.
https://www.foreignaffairs.com/china/end-china-economic-miracle-beijing-washington
Link incase it’s paywalled: https://archive.ph/jW3Y0