The 3 Ways China’s Economic Crisis Could End

China's economy has been stressed since 2020, worsening with Evergrande's default. The crisis affects all sectors, posing challenges for the CCP. This video explores potential outcomes and notes only one is favourable.

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0:00 Intro
0:45 How to think about China’s Economic Crisis
2:28 How to solve it
2:59 Option 1: Keep Consumption Low
4:06 Option 2: Decrease exports and investment
5:01 Option 3: Increase consumption
6:52 Conclusion
7:09 Sponsored Content

[MrTapierwithmustache]

I heard that the problem with Chinese housing is that rather than it being a problem in consumption is that it was one of the few ways people could invest, so they bought multiple houses per household. So at this point there are way more houses than would ever be needed, especially as the demographics continue to worsen. Leaving them all with massive debts and useless property, so I suppose it is more likely a reason for consumption staying low rather than being a problem due to low consumption.
But I'm just some guy on the internet, look for a more credible source to get the details.

[bellezayverdad]

Very fast ageing population coupled with very high youth unemployment rate. It is difficult to understand unless there's a big crisis in demand and lots of overinvestment in very unproductive enterprises.

[andrewmitchell]

There could be an asteroid hitting earth but the CCP would still be forecasting 5% annual growth lol.

[ziyu]

I'm a Chinese. I think companies in China are not safe as they lack healthy free market environments, companies' owners never know when the government will intervene in their business, therefore, they're restrained in development. The government uses low tax rates and neglects workers' rights to counterbalance the restrain, which leads employees staying in bad economic conditions so they can't consume a lot.
This method can not work anymore. People used to ignore workers' rights as GDP grew quickly, but now they can't continue to be like that because it's not only against human rights but also harmful to economy.

[yabutmaybenot.]

The irony of the financial crisis in China is that they've been over reporting their GDP gains for decades.
The situation is much worse than we know, as we don't have accurate data.

[wiryantirta]

5:47 ding ding ding ding! sums up the sole reason for CCP's existence

[napobg]

The IMF expects realistically 0% economic growth. And it is actually negative for 2023. Last year the GDP of China was 17.9 trillion. This year it is expected to be 17.7 trillion. This is because while the Chinese economy grew in yuan terms the value of these yuans became lower relative to the USD.

[Fredreegz]

Does anyone else feel like the word 'crisis' is way over used these days?

[beveragebrit]

How has it taken this long for me to realise that Ben and Jack are different people?

[technetium]

I'll say it here and ill say it again, wolf warrior diplomacy has been a disaster for China, foreign direct investment which would've sucked up on the overabundance of highly skilled workers have slowed down and uven reversed, trying to pull out af the country, and created an atmosphere of protectionism especially against China in politically palatable and economically tolerable

[patmccall]

The Chinese system isn't designed for profitability, it's designed for output and employment

[anitagorse]

Could it be that people have lost trust in CCP with distasterous covid policies? There are many people in China with money to spend and invest, but something tells me they are no to eager to invest in China.

[knpark]

6:10 You don't need to imagine. Previous administration in South Korea tried to come up with the similar idea, which is basically a wealth redistribution scheme aimed at encouraging domestic consumption. Now you cannot mention "you-know-what" in this part of the internet without raising a flaming dispute between two or more sides. The phrase "you-know-what" is now as divisive in Korea as "trickle-down economics" is in America, and I refuse to spell it myself because of it.

[_awkwardmf]

China produced more than all of the g7 last year…

[angel_machariel]

It's very helpful to read "WHAT’S BEHIND CHINA’S CONCEPT OF ‘DUAL CIRCULATION’?" by Torsten Weller, China Policy Analyst.

But here's a TL;DR of what China is doing for a while now. The difference is that it appears that China is serious about it this time. They wanted to move away from a purely export-driven economy (and investment economy) for a while, but previously they weren't motivated enough.

China's adopted a "dual circulation" strategy which aims to create two complementary economic circuits:


1. **Internal Circulation**: Focuses on boosting domestic consumption and reducing reliance on foreign markets. This involves strengthening the domestic supply chain, increasing consumer spending, and advancing tech self-sufficiency.

2. **External Circulation**: Focuses on foreign trade and investment. The idea is not to abandon export-led growth but to make it more sustainable and less susceptible to external shocks like trade wars or global recessions.

The "dual" aspect means that these two circuits are intended to reinforce each other.
The strategy aims for an economy that can adapt to changing global conditions while meeting domestic needs.

[bobuilt]

Please stop the flashing grid in the background of info cards, it's very difficult to watch.

[markc]

And the West has been driving our wages lower every year, saying we need to compete with Chinese low wages. So we're heading for a poor financial situation ourselves

[novat]

I think there is a base misunderstanding going on. The Chinese economy has been suffering for over a decade.
Extremely high real estate prices IS an economic crisis. Again, extremely high real restate prices IS an economic crisis.
Chinese car manufacturers putting aside cash money from the car production and research branch, to speculate in real estate IS an economic crisis.
Just because the CCP apparatus has been able to technically keep the mathematical formula that is GDP, a positive number. Does not mean you don't have an economic crisis. Heck, the CCP is STILL pulling all the levers in order to keep the CCP formula positive.
The core of the problem is the CCP itself, and the excessive levels of corruption in the lower and middle management of the CCP. Even in 2023, middle management is taking on huge loans in order to expand cities whose population is shrinking. Because 1. The developer will hand them cash for doing so 2. The province coffers will fill up, allowing for higher legitimate pay.

The Chinese people have been constructing, buying and selling completely worthless real estate between each other for years. It's collapse is a good thing, not a crisis. No one will ever live in them. A significant portion of them are very poorly constructed, especially the last 5-10 years. And recently, a lot of projects are not even finished.

There will NEVER be a rise in consumption in China. Because that would mean the CCP would have to give the people ACTUAL goods and services as payment for labor provided.

[damonhymer]

I recall the myth around the early Ford workers being paid well enough to purchase a Ford. Maybe it was true

[jerryrichardson]

Got the book a while back, I've only read part of it.