China, from exponential growth to economic debacle

“China has finished its period of economic growth and is now just is in download, is in descent, is in autumn“, he assures Luis ZunigaFormer diplomat and political analyst, in an interview with Diario Las Americas,

Zuniga explains that the exponential growth that the Asian nation has experienced in recent years has been driven by the economic openness that is inherent in the system. “Wild Capitalism”which cuts workers’ rights, and lower production costs, which have created “Creator of the World” Since the 1980s.

“It was a country with many resources but very low productivity and technologically very backward. Investors brought knowledge, technology and capital to ChinaAnd this made it easier for China’s gross domestic product (GDP) to grow,” he says.

However, he believes that Asian countries, with GDP of 17.6 trillion dollarsEconomically it is far from overtaking or catching up with the United States, which is ahead of it by 10 points. GDP of 27.3 trillion dollars,

,China’s statistics are neither reliable nor verifiable Because, like all communist countries, they use figures and statistics, which are not verified by world economic institutions, for the political propaganda of their system,” he explains.

a bug”

Zuniga says that the economic growth that China produced was also founded on the incorporation of technologies copied from foreign investors who were forced to hand over patents on what they produced in the Asian nation, and Spying for countries like the United States and Germanymostly.

In his opinion, this is a “fundamental flaw” that has plagued Chinese development in recent decades. ,China has made its technological development on the basis of copy or hackBut there is no university, academic, technical, scientific knowledge base that supports the maintenance or development of that technology,” he emphasises.

“counter Reformation”

With Communist Xi Jinping coming to power in 2013, China launches “counter-reform” process Which, instead of benefiting the economy of this country, coupled with poor distribution of resources, has led it to a situation “economic debacle”The analyst explains.

Xi Jinping, a “Maoist” with “supremacist” and “Marxist–Leninist” philosophies, began imposing regulations and controls on large Chinese private companies after taking office, e.g. Alibaba Group and Tencent Holdings LimitedIn others.

“Xi Jinping went so far as to ban Jack Ma, one of China’s biggest private businessmen and the owner of Alibaba, from free trading of Ant Group’s stocks and bonds. it was going to happen largest public offering in the history of the financial world and Xi Jinping personally banned it,” Zuniga mentions.

building ghost towns

Zuniga mentions that another problem in Chinese economic policy is the poor distribution of its resources, which were mainly directed within the framework of the construction sector. Belt and Road InitiativePromoted by Jinping.

This global infrastructure development and international cooperation project was primarily focused on Underdeveloped countries, but with natural resources which can serve as supplies for Asian nations strategic area In which they can establish military bases.

is an example of Djibouti, Located in the Horn of Africa and with access to the Red Sea, where in 2017 China inaugurated its first military base abroad in return for a loan to the African country.

In addition, Xi Jinping also allocated a large amount of resources The creation of vast and modern urban complexes that eventually became “ghost cities”Which are practically uninhabited.

Zuniga claims, “There were two ideas of development in the communist mentality: one was infrastructure and the other was iron and steel industry, and both ideas were wrong.”

real estate crisis

The real estate sector, the backbone of the Chinese economy, has faced a dire situation in the past two years following overinvestment, collapsed infrastructure and the collapse of large real estate companies.

The crisis became evident in 2021 with the announcement of the bankruptcy of Evergrande Real Estate Group, one of the largest real estate companies, which had more than $300 billion in debt. “Real estate accounts for 25% of China’s GDP, so the economic debacle is huge.”Maintains Zuniga.

The real estate crisis has had a direct impact on the banking system, whose main source of income was the real estate industry. “All the mortgages and all those loans no longer reach the banks because China’s biggest construction companies have gone bankrupt,” he explains.

This has prompted the People’s Bank of China (PBPC) to series of infusions of money into the financial system of the country and will be announced on February 20 interest rate reduction To ease the pressure in the event of real estate crisis, for five-year loans, it increased from 4.2% to 3.95%.

conflict with America

Zuniga points out that the confrontation China maintains with the United States and various Western countries is joined by its growing alliance with Russia and Iran, aimed at “Create a new world order” Due to this, Asian nations have become distant from their main markets, the American and Western European markets.

Given this scenario, analysts envision a complicated outlook for Beijing, which is why they believe its response to this “economic debacle” it is facing should be awaited.

“We have to see how they will deal with this crisis because I don’t see any exit, They’ve alienated their core market, they’ve aligned themselves with Putin, the worst ally they could have. China is a threat to the world order It exists at this moment, for the sake of freedom and for the democratic systems of the world, because of their growing influence and because of the ongoing arms race,” he emphasizes.




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