FRIDAY THE 13 Posted January 3, 2024 Posted January 3, 2024 The Chinese economy is facing great difficulties, and among the limited recovery options there are two paths: the first is full reintegration into the global system, or strengthening the real estate sector. However, the fear is that the decline of the Chinese economy will result in suffering for the economy of the West and perhaps the entire world. In an article published in the American magazine "Newsweek", writer Simone Zhao said that integration into the global system was a major driver of the remarkable economic growth achieved by China over the past four decades, considering that China's economic foundation is based on three pillars: investment, consumption, and exports. However, the first two pillars (investment and consumption) have proven problematic. The Chinese economy has relied heavily on real estate and government infrastructure projects, but the real estate market has turned into a bubble that is not equivalent to the role it plays in ensuring the strength of the economy, despite temporary growth. Infrastructure investments aimed at boosting GDP face similar problems, which also makes investing in it an unreliable foundation. The second pillar, which is consumption, also suffers from problems, as the consumer base in China is still weak due to the great disparity in wealth, where a small group of wealthy people lives with a majority of poorer citizens, whose spending alone cannot support the economy. The writer stated that the real strength of the Chinese economy revolves around industrial exports, as the “global factory” status that China enjoys is where it reaps real profits. China's cooperation with the West has led to significant progress in the fields of science, technology and business operations. Gao believes that if China can rebuild this pillar, there is potential for economic recovery. However, the path to this has become very difficult, as there are rising labor costs and geopolitical factors, and the position of Chinese President Xi Jinping indicates that he is increasingly abandoning integration as a goal. His absence from the recent G20 summit in India was clear evidence of his reluctance to deal with the leaders of the richest and most influential countries in the world. play video Video duration: 02 minutes 47 seconds 02:47 Western interest Beijing also recognizes that U.S.-China relations are unlikely to return to their previous status, in which the United States provided access to markets, finance, technology, and management training, all of which are essential to China's economy. According to the author, the most convincing argument that China is currently presenting to the West is that the economic problems facing China will harm the global economy, including the United States and the West, if cooperation is not provided with it. Gao believes that China is right: It is in the West's interest to help China avoid economic collapse, as the Western world has a special interest in ensuring the stability of the Chinese economy. Recently, US Commerce Secretary Gina Raimondo said, “Our trade with China is more than $700 billion each year, which supports hundreds of thousands of jobs in the United States. So anything we can do in trade with China creates jobs in the United States or helps “If we achieve this, the growth of American companies and innovation is a good thing.” As China's hopes of reintegrating into the global system diminish, intensive policies have emerged to stimulate the real estate sector. These policies include lower mortgage down payments and much lower interest rates, along with the removal of purchase restrictions in many cities. These measures temporarily boosted the real estate sector, preventing economic collapse and buying time to explore alternatives. In contrast, shares of Chinese real estate companies rose. https://www.aljazeera.net/ebusiness/2023/9/24/نيوزيوك-لماذا-سيعاني
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