• Sat. Jun 10th, 2023

Letter: Yet another Asian economy facing protectionist woes


May 25, 2023

Ruchir Sharma has rightly punctured dreams of a sustained reopening boom in China (Opinion, Could 21). Certainly, old China hands see its economy as a distant (but far bigger) echo of Japan’s at its 1990 peak, and for the identical factors — weakening demographics and as well a lot debt fuelling as well a lot investment, in Japan’s case corporate investment, in China’s case infrastructure and residential house.

China is also experiencing the identical US protectionist backlash as Japan did then. This time, even though, a sluggish Chinese economy could have additional really serious international ramifications, and not just in terms of weakening demand for raw components such as iron ore and copper. Germany, which lengthy ago hitched its wagon to China’s star, and benefited hugely from exports of vehicles and machinery could now endure from China’s drive for self-sufficiency. Its auto exports to China are falling, even though Chinese brands are squeezing out German tends to make domestically and are poised to invade the EU industry.

And what are Chinese domestic investors undertaking — getting gold at a premium to globe costs. Not a sign of self-confidence in their personal economy.

Richard Cragg
London KT1, UK

Leave a Reply