Cross posted from: https://lemmy.sdf.org/post/33679319
[...]
With a population of 1.4 billion, China has, in theory, a huge domestic market. But there's a problem. They don't appear willing to spend money while the country's economic outlook is uncertain.
This has not been prompted by the trade war – but by the collapse of the housing market. Many Chinese families invested their life savings in their homes, only to watch prices plummet in the last five years.
Housing developers continued to build even as the property market crumbled. It's thought that China's entire population would not fill all the empty apartments across the country.
The former deputy head of China's statistics bureau, He Keng, admitted two years ago that the most "extreme estimate" is that there are now enough vacant homes for 3 billion people.
[...]
And it's not just house prices that worry middle-class Chinese families.
They are concerned about whether the government can offer them a pension – over the next decade, about 300 million people, who are currently aged 50 to 60, are set to leave the Chinese workforce. According to a 2019 estimate by the state-run Chinese Academy of Social Sciences, the government pension fund could run out of money by 2035.
There are also fears about whether their sons, daughters and grandchildren can get a job as millions of college graduates are struggling to find work. More than one in five people between the ages of 16 and 24 in urban areas are jobless in China, according to official data published in August 2023. The government has not released youth unemployment figures since then.
The problem is that China cannot simply flip a switch and move from selling goods to the US to selling them to local buyers.
"Given the downward pressure on the economy, it is unlikely domestic spending can be significantly expanded in the short term," says Prof Nie Huihua at Renmin University.
[...]
Xi is also aware that China has a disheartened younger generation worried about their future. That could spell bigger trouble for the Communist Party: protests or unrest.
A report by Freedom House's China Dissent Monitor claims that protests driven by financial grievances saw a steep increase in the last few months.
All protests are quickly subdued and censored on social media, so it is unlikely to pose a real threat to Xi for now.
[...]
China will have to tread carefully. Some countries will be nervous that products being manufactured for the US could end up flooding into their markets.
[...]
There are barriers to Xi presenting himself as the arbiter of free trade in the world.
China has subjected other nations to trade restrictions in recent years.
In 2020, after the Australian government called for a global inquiry into the origins and early handling of the Covid pandemic, which Beijing argued was a political manoeuvre against them, China placed tariffs on Australian wine and barley and imposed biosecurity measures on some beef and timber and bans on coal, cotton and lobster. Some Australian exports of certain goods to China fell to nearly zero.
Australia's Defence Minister Richard Marles said earlier this month that his nation will not be "holding China's hand" as Washington escalated its trade war with Beijing.
China's past actions may impede Xi's current global outreach and many countries may be unwilling to choose between Beijing and Washington.
[...]
This trade war has China looking in the mirror to see its own flaws – and whether it can fix them will be up to policies made in Beijing, not Washington.