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<p>Governments around the world are increasingly concerned about China’s unstoppable economic rise. The Chinese conquest on a global scale is marked by a massive export of goods, creating a worrying trade imbalance. This text examines the roots of this phenomenon, its implications for the global economy, and the measures taken by various countries to address it.</p> 
<h2 id="h-trade-a-miraculous-cure-for-chinese-economic-problems">Trade: A Miraculous Cure for Chinese Economic Problems?</h2> 
<p>Have China’s economic problems dissolved so quickly when the figures were abysmal some time ago? The <a href="https://www.nytimes.com/2024/07/12/business/china-trade-surplus-record.html" target="_blank" rel="noreferrer noopener">huge Chinese trade surplus</a> has elicited many international reactions.</p>
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<p>In June, <strong>Chinese exports reached $308 billion</strong>, marking <strong>an increase for the third consecutive month</strong>, while imports fell to $209 billion.</p> 
<p>This situation created <strong>a record trade surplus of $99 billion</strong>, exacerbating the economic imbalance with China’s trading partners.</p> 
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 <img decoding="async" src="https://defencepk.com/forums/attachments/_20240712160755-png.55177/" alt="Chinese trade surplus soars">
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  China’s Trade Surplus Soars
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<p>This surplus is largely fueled by <strong>weak domestic demand</strong>, which drives China to turn to foreign markets to sell its products.</p> 
<p>This dynamic, however, comes at a cost. In response to this flood of Chinese products, several countries, including the United States, the <a href="https://www.cointribune.com/en/economy-china-hits-back-at-eu-tariffs-with-explosive-investigation/" target="_blank" rel="noreferrer noopener">European Union</a>, and Brazil, have imposed <strong>new taxes on Chinese imports</strong>, notably on electric vehicles and household appliances.</p> 
<p>These trade tensions are a symptom of <strong>a deeper malaise</strong>: China uses its trade surplus to compensate for weak domestic demand and a crisis-ridden real estate market.</p> 
<p>Falling apartment prices, which constitute a large part of Chinese household savings, have reduced domestic consumption, forcing the country to export more to keep its economy afloat.</p> 
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<h2 id="h-china-s-financial-strategy">China’s Financial Strategy</h2> 
<p>Finance plays a central role in China’s strategy to maintain its economic growth. With millions of people seeking to save in <strong>response to the real estate crisis</strong>, the Chinese government has redirected bank loans from the real estate sector to the manufacturing industry.</p> 
<p><strong>New bank loans</strong> to industrial borrowers reached <strong>$614 billion</strong> over the twelve months up to March, six times more than annual loans to these borrowers before the pandemic.</p>
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<p>This massive reallocation of financial resources is an attempt to offset the slowdown in the real estate market by boosting industrial production.</p> 
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  <img decoding="async" src="https://defencepk.com/forums/attachments/_20240712162527-png.55179/" alt="China monthly trade balance">
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   China’s Monthly Trade Balance
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<p>However, this policy is not without risks. <strong>Manufacturing overcapacity could lead to a drop in the prices of exported products</strong>, exacerbating existing trade tensions with foreign partners.</p> 
<p>Moreover, focusing on industrial expansion rather than stimulating domestic demand could prolong China’s economic problems in the long term.</p> 
<p>Chinese officials hope that <strong>increasing exports will keep factories open and create jobs</strong>, but excessive dependence on foreign markets could backfire if trade relations continue to deteriorate.</p> 
<p>A quote from economic expert Bruce Pang sums up this situation well:</p> 
<p>“<em>The record surplus could also fuel those quick to judge China’s manufacturing overcapacity and perceived dumping practices to bolster trade.</em>”</p> 
<p>This statement illustrates the challenges China, <a href="https://www.cointribune.com/en/crypto-china-could-restore-mining-4-billion-at-stake/" target="_blank" rel="noreferrer noopener">recently interested in bitcoin mining</a> (BTC), faces as it attempts to navigate an increasingly hostile global economy.</p>  
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  <a href="https://fr.tradingview.com/symbols/BTCUSD/?exchange=BINANCE" rel="noopener" target="_blank"><span class="text-primary-color">BTCUSD chart</span></a> by TradingView
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<h2 id="h-impact-on-the-global-economy">Impact on the Global Economy</h2> 
<p>The repercussions of China’s trade surplus on the global economy are significant. Massive Chinese exports, combined with weak domestic demand, mean that <strong>other countries must absorb an increasing amount of Chinese goods</strong>, jeopardizing their own local industries.</p> 
<p>In response, many governments have intensified <strong>protectionist measures</strong>, raising tariffs and imposing trade barriers to protect their national industries. These actions risk escalating into a full-blown trade war, with potentially devastating consequences for the global economy.</p> 
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<p>The trade imbalance with China is not limited to the United States and <a href="https://www.cointribune.com/en/brics-the-trade-war-between-china-and-the-eu-is-intensifying/" target="_blank" rel="noreferrer noopener">the European Union</a>. Countries like India, Turkey, and even Brazil, a member of BRICS, also feel the effects of the flood of Chinese products on their markets.</p> 
<p><strong>Growing tensions within BRICS</strong> are particularly revealing: despite their common goal of reducing economic dependence on Western powers, China’s rise creates friction.</p> 
<p>Brazil, for example, has recently imposed <a href="https://www.cointribune.com/en/brics-brazil-imposes-a-heavy-tax-on-china/" target="_blank" rel="noreferrer noopener">a heavy tax on Chinese imports</a>, a clear sign of the fear of Chinese economic hegemony, even among its supposed allies.</p>

Economy: Chinese Exports Create a Global Imbalance

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Ďalšie články zverejnené 13. 7. 2024

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