“China spent 20 years destroying emerging-market competitors in the manufacturing space, or at least squeezing them out of global markets. Now it’s threatening to do the same to advanced economies’ manufacturers,” added Robertson.
Nobody put a gun to Global North capitalists’ heads and made them offshore their manufacturing and de-industrialize their own countries.
Citigroup analysts said this month that falling prices in China could help to hasten moves by central banks in emerging markets to cut interest rates this year, particularly in countries that consume relatively large shares of Chinese goods.
“We as investors are only just starting to connect the dots” on how falling prices imported from China might play out across markets, said Luis Costa, global head of emerging markets sovereign debt strategy at Citigroup. “The question is the magnitude.”
Stephen Stanley, chief US economist at Santander Bank, said that any impact was likely to be small. “The biggest deflationary force in goods prices here of late has been used vehicles, which has nothing to do with China,” he said.
BYD, China’s biggest carmaker, recently announced price cuts of between 5 and 15 per cent for its electric vehicles in Germany, after Mercedes-Benz warned late last year that its profits were being hit by a “brutal” price war in electric vehicles.
I don’t think you were talking about me, but even if you were that’s not very nice.
The original commenter was suggesting that this is great for the US and maybe other western states, but I was noting that any benefit to the west will be at the cost of the Chinese.
I’m not upset that the west will benefit (I’m from Canada), but it’s pretty cunty to reduce a global economics story down to how it will benefit just one nation.
Edit: I should add - deflation is probably bad for China and Chinese people. It’s not driven by growth, but by lack of spending.
For the Chinese economy, it signifies, as other commenters have noted and as pointed out in the article, the presence of a highly efficient Chinese industrial base capable of meeting not only domestic demand but also exporting increasingly sophisticated manufactured goods. While oversupply might trigger deflation domestically, the (planned) inflation target of around 3% for 2024, as suggested (and confirmed) by the article, indicates that China is successfully boosting exports instead. This indicates their ability to acquire capital for reinvestment, further enhancing their economy.
Internationally, for consumers, this is positive news, especially in the post-COVID and Ukraine conflict period where inflation has pushed up prices, making goods more expensive. The availability of competitively priced Chinese goods, as the article terms it, “exporting deflation,” therefore benefits consumers worldwide.
However, on an international scale, this trend could potentially pose challenges for other nations trying to develop competitive domestic economies. It creates significant pressure within the capitalist mode of production, potentially making it difficult for other economies to compete effectively. Hopefully forcing them change the mode of production, realistically they will likely go the protectionist route.
Serious question: is English your first language? Adding “I guess” to their statement changes the meaning significantly… It denotes a frustration that the Chinese people are being ignored… And a certain amount of sarcasm.
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