Chinese Economics Thread

[jli88]

China will eventually have to give something up, either by importing more or by stimulating domestic production by partially shifting its production matrix abroad; in both situations, this affects the Chinese trade surplus. China's economic future will no longer involve such a favorable trade balance generating huge surpluses, but rather increasing its gross national product.

A simple appreciation of the RMB would do.

These trade surpluses will continue to create frictions. Even friendly countries like Indonesia, Malaysia are raising barriers.

Getting trade barriers up while retaining a weak RMB is the worst case scenario.

 

[abenomics12345]

China will eventually have to give something up, either by importing more or by stimulating domestic production by partially shifting its production matrix abroad; in both situations, this affects the Chinese trade surplus. China's economic future will no longer involve such a favorable trade balance generating huge surpluses, but rather increasing its gross national product.

Agreed. This is why I vehemently disagree with the points people made earlier about how "just let Europe do its thing and dare them to launch a trade war with China".

China is no longer at a point where it needs to be precious about 'maintaining a massive trade surplus' just like how the PLA no longer needs to be precious about 'having 10000 tanks'.

 

[tankphobia]

I mean isn't there still huge room to grow for domestic software industry? Something as fundamental as offering an alternative to windows based OS (Harmony os?) or SAP would go a long way towards stimulating domestic service spending, it would also hopefully divert some of the STEM talent from manufacturing to reduce involution within those industries.