Could China fail? Will China Collapse?

Could China fail?
#chinasnewnormal
TIMESTAMPS
00:00 Could China Fail? This claim has been made for past 30 years, so why has China’s bubble never popped?

01:55 There are 3 main themes about China’s collapse: 1. Systemic risk 2. Societal risk and 3. Matters of survival

04:07 SYSTEMIC RISK There are four main themes: 1. Communist party of China 2. Debt of China 3. Growth Decline 4. Bubbles.

04:17 Communist party of China. Is China rigid or the country that has been reforming and changing more than any other country. Is the CPC decentralized or centralized
06:49 Debt of China. Debt of China is high, but much based on domestic saving, which is better manageable. The biggest risk is local government debt where sale of land is decline.
09:45 Growth decline. China will slowdown in GDP growth, but as China is the second largest economy and that means that China will continue to add more to its economy than any other country in the world. Consumption will solve the growth decline over time as Chinese start spending more instead of saving.
12:45 Real-Estate bubbles. China will not head into a financial crisis because of the bubbles because China has more instruments to manage their bubbles.

16:11SOCIETAL RISKS There are four main themes: 1. Environment 2. Demography 3. Productivity 4. Middle-Income Trap

17:13 Environment China is the biggest polluter in the world, but also the biggest investor in renewable energy capacity in products and connectivity on the grid. This is a bigger opportunity than it is a problem

19:30 Demography China’s population is shrinking and as factory of the world, this is a huge challenge for the future of China. The opportunity lies in the triggering of social reforms, innovation and raising the productivity to deal with the demography issue.

22:02 Productivity The productivity in China is much lower than the Western world. But this is a huge opportunity as China wants to educate their citizens to increase the value each worker and add more robots and automation, which they are doing faster than the Western countries.

24:41 Middle-Income Trap China could be stuck in middle Income trap, which is been claimed for decades. In 2023, China will reach the high-country status. This issue is less of an issue as millions of people are joining the middle class every year now

28:00 SURVIVAL RISKS There are four main themes: 1. Unemployment 2. Taiwan 3. Resources 4. Tech War

29:12 UNEMPLOYMENT This is in my view the biggest risk for China to continue China’s growth. Unless they contribute to the value of society this could derail China. Only by opening China’s markets further, this will not be simple to resolve.

32:13 The red line: Taiwan A war in Taiwan is unlikely, but an incident could happen. Especially in 2024 with the election in Taiwan and in US, the Taiwanese independence will become a campaign topic. That is dangerous as it could spark the tensions even more.

34:46 Resources: Water, Food and Energy China needs to become more self-sufficient on these 3 resources. China however needs to work with the world to resolve these matters, and therefore their cooperation with the global South on trade of resources in exchange for products and innovation from China.

37:12 Tech Wars. Biden’s Chip & Science act has created a direct tech war. This has created a change from China becoming the leader in innovation. More about this can be found on my monthly newsletter. Do subscribe on my website for it www.pascalcoppens.com

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