Chinese New Year celebrations in Beijing

The country is trying to open up after the harsh corona measures.

(Photo: AP)

dusseldorf Even after the end of zero Covid restrictions, the risks to the Chinese economy and politics remain high. In a survey by the China Institute Merics, the results of which were previously made available to the Handelsblatt, 880 experts from China are mainly skeptical about developments in the world’s second-largest economy.

Among the main challenges they cite the instability of the real estate sector and the further development of the Covid policy. Observers also count excessive government intervention in the economy and an end to access to key technologies from abroad among the risks. In addition, there is an imminent global recession for foreign trade.

Chinese Vice Premier Liu He, head of economy and finance, told the World Economic Forum in Davos on Tuesday that China’s growth will return to “normal trend” this year. Business investments and consumption would ensure this above all else. However, Liu acknowledged that there are still risks in the real estate sector.

According to Chinese information, the gross domestic product increased by three percent last year, the second lowest value in decades after the Covid 2020 year.

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Today, Wednesday, Liu wants US Secretary of the Treasury. janet yellen meet in Zurich. He announced in Davos that China would push for “economic reglobalization.” Above all, Yellen hopes that China will become more involved in restructuring the debt of poor countries in trouble.

>> Read also: China is clearly missing its growth target

After the country opened up to Corona, Chinese politicians are trying to improve relations around the world in a kind of charm offensive. Last year, the US imposed strict restrictions on the export of technology to China. For some Chinese companies, this has become a problem due to lack of semiconductor deliveries or lack of access to the machines that produce chips.

Chinese experts expect an economic unraveling between China and Europe

US-EU relations and the Beijing leadership had recently suffered from China’s attitude in the Ukraine war. Most China watchers in the Merics survey are convinced that little will change here.

Therefore, the head of Merics, Mikko Huotari, warned with a view to the relations between Europe and China: “A possible charm offensive from China will not change the fundamental course that Beijing has taken.” European Union (EU) must define what limits it wants to set, for example, for sensitive technological links with China. “The question of which course the alliance’s most important partner, the US, is taking, must of course play a central role, even if the EU presents different political approaches in assessment and design.”

Chinese Vice Premier Liu He in Davos

Return of the economy “to normal trend”?

(Photo: Bloomberg)

The China watchers surveyed assume that the EU and China will tend to drift apart economically over the next five years. For this year, most already expect economic relations between the EU and China to decline in most cases. This could be the case, for example, for EU technology cooperation and exports to China, EU investment in China and the secondment of EU staff to China. In his opinion, only Chinese exports to the EU should recover this year.

Chinese experts recommend the EU further diversify beyond China

Politically, the vast majority are convinced that the EU should focus primarily on diversifying its global partnerships, for example in the Indo-Pacific region or in Africa. With the Global Gateway program worth billions, the EU wants to counter the global expansion of China’s power. However, short-term successes have so far been limited.

Just under a quarter of Chinese experts surveyed recommend that the EU move closer to tougher US restrictions, for example, on the export of technology.

Facing Beijing’s claim to world leadership, Chinese observers surveyed assume the country will try to achieve its ambitions this year, especially through those of the head of state. Xi Jinping implement the proposed Global Security Initiative. Xi proposed this initiative last year and wants to offer an alternative to the Western-dominated security order.

Experts also expect China to focus less on the Belt and Road Initiative (BRI) this year and more on the Global Development Initiative announced last year, which aims to strengthen relations with China. Africa, among other things.

More: China’s population decline could pose a risk to the global economy

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