14 July 2024, Sunday, 1:40
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‘Xi Jinping Is Teetering On The Brink’

‘Xi Jinping Is Teetering On The Brink’

A Ukrainian diplomat explained what China's economic difficulties could lead to.

China faces economic difficulties, with both exports and imports declining in 2023. Foreign capital is leaving the country.

Has China's economic miracle come to an end? Will Beijing now lose in the confrontation with the United States?

Charter97.org website spoke about this with diplomat and expert at the Ukrainian Center for Defense Strategies Oleksandr Khara:

— China has internal problems that can be associated with the nature of the communist government (which controls all life in the country) and the changes that have occurred over the past 6-7 years.

By and large, the liberalization of China allowed Western capital and technology to enter the country. But that amazing double-digit GDP growth for several decades has come to an end for several reasons.

Firstly, due to the growing influence of the Communist Party. Secondly, external factors influenced it, starting with the COVID epidemic, which China had a hard time with and came out of it quite slowly.

Plus there was the growing confrontation between the United States and its allies and China, as well as the behavior of the PRC in its region. Russian support also played a role in the war against Ukraine.

After impressive growth, China's GDP is now at 4%, and may even drop from 2026 to 2030 to 3.8%. China remains a major economy, but it's certainly not what they hoped for. They wanted to convert economic power into political change on the global stage. Including the creation of a new system of international relations.

The PRC has a crazy debt system: China's foreign debt is $13 trillion. There is also the problem of domestic debts, which range from 7 to 11 trillion dollars. China is teetering on the brink.

Another important aspect is that due to tense relations with the United States and the idea of the Americans to reduce their dependence on key points, investment money is flowing out of China. According to data for August last year, $24 billion was withdrawn from the Chinese economy, which went to other Asian countries, primarily India.

It's simple, the communists want to stay in power, so they want to control business. They also shut the mouth of the richest people who pose a threat. We remember the USSR, we see very well what is happening in Belarus and the Russian Federation, when the authorities control everything.

It is also influenced by the fact that China does not have enough resources to dramatically change something in the economy, restructure it and solve problems.

— Will this decline affect the confrontation between the United States and China?

— The United States and European allies are tightening the Chinese’s access to their own technologies. Theft of intellectual property rights in China has always been a problem for Americans and Europeans. Chinese legislation requires that all foreign companies operating in the country must share technology. This is a prerequisite for entering the market. Using technology, China is increasing its influence.

However, the Chinese want to establish more or less stable relations with the Americans and Europeans. This is one of the reasons why China does not help Russia with arms and ammunition. They are afraid of making the relationship worse. Investment, trade, and avoidance of sanctions are important to them.

The Chinese cannot abandon their junior partner Putin, but on the other hand, they cannot help him any more, since then relations with the West deteriorate, which affects China’s economic interests. This undermines the role of the party, which can create big problems for it.

— Authoritarian leaders often go to war to divert attention from economic problems. Which path will Xi Jinping choose?

— Let's hope that Xi Jinping will not make the same mistake as Putin. And between the United States and China, cold relations will remain, which are more controlled. Xi Jinping is not interested in spoiling them.

In fact, few can help him: Russia is weak. Yes, it is helping now with cheap resources, but it is unlikely to be a valuable assistant to China in the event of a conflict. I'm not even talking about other states. Now is not the time for China to make dangerous moves.

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