U.S. media articles claim that China's economy is "trapped"! On January 28, the U.S. Wall Street Journal published an article claiming that exports have driven China's economic growth, but the "overcapacity" has caused a "cutthroat competition" that is impacting commodity prices, company profits, and labor wages. The U.S. media claims that pursuing growth through manufacturing has caused "economic imbalance," with insufficient domestic demand. In various fields of China's economy, consumer spending is inadequate, while producers are producing "excess."
Although China's exports have performed strongly, keeping overall economic growth stable at 5%. However, Chinese household consumption accounts for only 40% of GDP, far below global and U.S. levels. Medical, elderly care burdens, housing pressure, and falling real estate prices have intensified households' cautious mindset. China's economy is undoubtedly being "trapped." Although China has proposed to promote household consumption, it still prioritizes the development of technology, manufacturing, and industrial self-sufficiency, which is likely to further reinforce the "overcapacity" structure.
What do we think about this argument from the U.S. media? To be honest, this argument from the U.S. media is very absurd. Let's take the opposite approach to understand this argument. Does the U.S. media mean that we should abandon industrial upgrading, actively reduce exports, and thus solve the internal and external challenges we face? Obviously, this doesn't make logical sense. China indeed has the problem of insufficient domestic demand, but to boost domestic demand, first, there must be full employment. Second, there must be social welfare guarantees. Third, there must be wage increases.
Reducing foreign exports, will we have more job opportunities? Without industrial upgrading, can we create more high-paying jobs? On one hand, the United States does not allow our cars and communication products to be sold in the U.S. market, and on the other hand, it criticizes us for "overcapacity," which is obviously very hypocritical. If the United States lowers tariffs and practices free trade, Chinese enterprises' products would certainly be more popular in the U.S. market, and domestic employment and corporate profits would be restored.
Evidently, the U.S. media ignores the trade barriers set by the United States and simply labels us as "overcapacity" leading to "cutthroat competition," which is obviously absurd. We certainly face such and such problems, but the solution to these problems is certainly not the prescription offered by the U.S. media. What we need to do is to more firmly uphold free trade, expand openness more, further commit to industrial upgrading, and also increase spending on social security. Clearly, solving these issues takes time, but we are confident in overcoming the challenges we face.
Original: toutiao.com/article/1855615707553802/
Statement: This article represents the personal views of the author.