China's economic stagnation has entered the "Garbage Time" phase--a term coined by Chinese essayist Hu Wenhui drawing an analogy from sports matches referring to final moments of the game where the end stands already decided. Significantly, it reflects deep economic despair that pervades China's domestic environment which could end up in political turmoil.
Chinese media has been abuzz with this "Garbage Time" economic barbs, directed more against Chinese President Xi Jinping's 12-year centralized mishandling of Chinese economy bypassing the Chinese Premier who traditionally set China's economic agenda.
Chinese Communist Party has thus been nudged into taking note of the "Garbage Tine" economic barbs and issue rebuttals as a conspiracy by defeatist forces within China and abroad.
Recent Chinee economic stimulus packages by China grudgingly undertaken on orders of President Xi have failed to restore investor confidence and significant outflow of foreign capital.
My Article of July 29 titled ' China's Declining Trajectory under 12 Years of President Xi Jinping Rule: An Analysis' highlighted the geopolitical and economic impact.
It was pointed out that any "Reverse Gears" by Chinese President was highly unlikely as major structural economic reforms inherently carry risks of political challenges to President Xi's continuance in power.
Since July 2024, Chinese economy continues to "stagnate" giving rise to significant global and regional implications discussed briefly below,
China as Economic Superpower Myth Bursts
With Chinese economy down sliding from 12% growth rates for decades to below 5% under 12 years of President Xi's over-centralized rule, China is no longer deemed as 'Economic Superpower'.
China's economic situation further worsened with President Xi's 'Anti Espionage Law' targeting foreign management and risk consultancy firms hastening outflow of foreign businesses.
China's Consequent Global Economic Leverage Takes a Big Hit
China for decades enjoyed great global clout in terms of global economic leverages. With economic stagnation not receding China stands hit badly.
China's 'Debt Trap' diplomacy luring weak economic countries like Maldives and Sri Lamka etc will be severely curtailed.
China's Oversized Miliatary & Internal Scurity Budgetary Spending Could be Impacted
While in the last Defence Budget China registered a 7% increase in spending but can the Chinese economy with less than 5% growth can sustain oversized Defence Budgets and for how long?
The demands on Internal Security spending are bound to grow but where is the money with the anomy stagnating?
China's Regional Belligerence Likely to be Reduced
Evidence of this can be seen with China's political and military reasonableness with India underway after four winters of intense military confrontation in Ladakh.
However, the first tentative steps by China in this direction should be viewed as "tactical and tentative" until China sustains it in the long term.
However, no evidence of reduction of Chinese belligerence against Taiwan, Philippines or in South China Sea is visible.
China Resents India's Neigborhood First Policies.
China's decreasing economic clout and India's increasing success in winning back Maldives and Sri Lanka has rattled China.
Chinese columnists' writings in Global Times betray China's deep resentment.
Global Eonomists have Opined China Itself Falling Into its Own 'Debt Trap'-- Most Significant Observation by Global Economists
Note global economists have opined that China itself could be entering into a classic 'Debt Trap' due to its production 'overcapacities', falling exports due to trade tariffs by many nations against Chinese dumping charges and US economic sanctions.
This could lead to severe domestic political turbulence in China with job cuts and rising unemployment in Chinese youth.
Concluding Observations
With China's $17 Trillion economy stagnating with no hopes of early structural transformation, China is entering a dangerous phase both domestically and globally.
China may have surpassed the Former Soviet Union in Communist rule longevity but this "Garbage Time" phase of China's economic stagnation resembles the Soviet Union's closing time of "Disintegration".
China survived the adverse impacts of Soviet Union's disintegration due to United States economic patronage.
The United States is currently not around to bail-out China's economic stagnation and consequent 'Disintegration". The United States may now hasten it to preempt Chinese aggression against United States in Indo Pacific.
India as China's Major Asian Rival needs to tread carefully in economic and trade dealings with China, despite noted Indian economists misinformed advocacy to permit Chinese FDI in India.
The above amounts to India underwriting China's aggression against India from China Occupied Tibet.
Overall, China's myth of being a "Superpower" sounds hollow and the Balane of Power against it globally and regionally stands considerably impacted.
No comments:
Post a Comment