VSt is a symbolic passing of the baton: the official sponsor of the Euro football tournament, which will take place from mid-June to mid-July in Germany, will be the Chinese electric car brand BYD. During the previous edition, it was the German Volkswagen. China has not yet conquered Europe, but it is already planting its banner there.
In recent days, the spotlight has been on the slowdown in Chinese growth, which is being weighed down by the crisis in the real estate sector. To compensate for this slump, the country is increasing industrial investments, thus strengthening like never before its arsenal of exports, of which the electric car constitutes the standard bearer.
This strategy is only the continuation of that which has allowed China to develop at a dazzling pace for twenty years, but its acceleration constitutes a major risk for the global macroeconomic balance. A crisis of overproduction threatens, with, as a result, a strengthening of trade tensions.
In a Chinese context of economic slowdown and deflation, the statistical data is surprising. In one year, investments in metallurgy, in electric cars or electrical equipment show double-digit increases. Even if the characteristics of the “factory of the world” have evolved, it continues to operate at full speed with the ambition of having a complete supply chain, self-sufficient in cutting-edge technologies, while ‘imposing as the central player in decarbonization.
Vague massive exports
The Chinese Prime Minister, Li Qiang, may have called at the Davos Forum in mid-January for the coordination of economic policies and “strengthen specialization” countries, the reality is more brutal. “China wants to be the Amazon of countries”, summary Damien Ma, co-founder of the American think tank MacroPolo, cited by Bloomberg. Like the American distributor, who sells everything, “China wants to be the country that manufactures everything”.
At this stage, the rebalancing of the Chinese economy towards a model less focused on investment and exports in favor of domestic consumption has remained in its infancy. Credit and savings, unable to invest in real estate, are now called upon to massively support industrial production in a sort of headlong rush. “Given the current structure of its economy, China expects that over the next decade its share of global manufacturing will grow twice as fast as its share of global GDP, and three to four times faster than its share in global consumption », anticipates Michael Pettis, professor of finance at Peking University, on the social network.
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