中文
By Daryl Guppy
An industry-level 3D printer on display at the 26th China Beijing International High-tech Expo in Beijing, capital of China, July 13, 2024. [Photo/Xinhua]
A perverse measure of success is the degree to which competitors take action to stop you. The more successful you are, the harder and more diverse the pushback.
Recent weeks have seen a rash of articles in Western media trumpeting a collapse in the Chinese economy. In the U.S. Congress, the so-called China week is filled with legislation designed to halt China's growth.
They all mistake the reorientation of the economy for a decline in the economy.
The third plenary session of the 20th Central Committee of the Communist Party of China confirmed the reforms necessary to shift economic orientation from a 20th-century model to an economy based on enhanced digital productivity and the provision of services. These reforms are designed to enhance the spread of common prosperity throughout society.
An independent measure of the success of this economic reorganization is gained from the actions taken by both the United States and Europe. The erection of trade barriers, the imposition of tariffs, the rejection of World Trade Organization (WTO) rulings and the attempted sabotage of the WTO would all be unnecessary if the U.S. and Europe truly believes that the Chinese economy is floundering or in trouble.
Western nations are imposing these barriers and hinderances to economic growth because they are already deeply worried about the level of China's economic growth. They appear willing to stop at almost nothing to prevent this growth continuing.
A BYD electric vehicle on display in Budapest, Hungary, October 17, 2023. [Photo/Xinhua]
Electric vehicles (EVs) are a good example of China's advanced manufacturing.
More than a decade ago, China took a determined path to develop effective and economic EVs. The result is a wide range of EV choices at every consumer price point. They are superior in design, in features and performance from the clumsy and inefficient vehicles produced in the West. Until recently, Western auto manufacturers did not seriously invest in EV technology.
The response to an economy increasingly based on advanced manufacturing is to unilaterally impose massive tariffs that are not compliant with WTO requirements. The hysterical response is a measure of China's success in developing an advanced manufacturing economy.
The advanced economy rests on high-end sophisticated computer chips. There was no concern about the universal availability of these chips when the U.S. believed China was lagging behind U.S. developments; but as soon as China became competitive in this area, the Donald Trump and later Joe Biden administrations tried to strangle this growth with sanctions and the CHIPS Act.
This did cause some temporary disruption, but China research and development produced home-grown solutions that are outstripping the lead once enjoyed by TSMC chips. The unintended consequence of the CHIPS act has been to reduce TSMC market share and shrink its profitability. Additionally, Dutch suppliers of high-end lithography machinery for printing these semiconductors are also losing market share with a significant impact on their balance of trade. The trade threats made by the United States against suppliers in other countries undermines trust in the United States' commitment to genuine free trade.
The diversity of trade sanctions provides further evidence of Western concerns about China's economic strength. These sanctions would not be necessary if the West truly believed the Chinese economy was weak, because then it would pose no threat. The U.S. in particular has chosen to try to sabotage the Chinese economy to stop its growth and that in itself is evidence that the outlook for the Chinese economy remains robust.
China's advances in artificial intelligence, quantum computing and other high-tech areas show that these sabotage attempts have not been successful. The foundations of the new, more productive digital economy, are firmly established and that's why U.S. pushback is so determined.
Partly through its own misuse of sanctions and manipulation of foreign exchange conditions for cross-border transactions, the United States has undermined its primacy in international trade settlement. Oil producing countries have rejected the petrodollar arrangements, leaving this vital commodity open to settlement in multiple currencies including the digital yuan. Attempts by the United States to throttle access to the SWIFT international trade settlement system have resulted in the development of competing systems, particularly among members of the BRICS community.
These ructions were, in part, designed to hamper China's economic growth but again provide perverse confirmation of China's continued economic strength.
China's economy is caught in a slow moving but irreversible shift towards improved productivity based on digitalization. Attempts to sanction, bludgeon with tariffs and deny resources are independent confirmation that the United States recognizes both the current and future strength of China's economic growth.
The author is an international financial technical analysis expert.
