We are starting to see China flexing its economic muscle
in preparation for full decoupling from the USA and the West. The
intention though not explicitly spelt out is discreetly loud and clear.
USA
companies in China are now facing serious challenges doing business
inside China. They are cutting prices of their products in the Chinese
market. Tesla, Apple and Nvidia are among those slashing prices of their
products in China. The Chinese market is their most important export
destination and demand center.
With China pivoting its move
towards enhancing domestic demand, Chinese products are going to
dominate the market inside China itself. EVs, smartphones and chips made
by Huawei and Semiconductor Manufacturing International Corporation
(SMIC) are going to take over a greater share of China's domestic market
and USA and Western companies are fighting for survival in China. China
does not need to resort to underhand tactics to keep them out or
banning them. The market will see to it.
The USA and Western
propaganda that China is using its industrial overcapacity to overwhelm
global market is going to come back to haunt them. The USA is coercing
China to expand domestic demand to absorb all the overcapacity and is
going to have its wish granted. If China manages to convince its
citizens to buy local and expand its domestic demand for products made
in China, less of such Chinese products will be exported and that is not
good for the USA and the West. The USA and the West asked for it, they
will get what they wanted. This is also in line with the decoupling move
that the USA and the West is working very hard to achieve, and China is
giving them a helping hand.
Those of the countries in the
Global South are going to benefit as decoupling with the USA and the
West reaches its pinnacle. Chinese goods will flood the Global South, a
blessing in disguise for them. The Global South have little capacity for
making EVs, smartphones or chips. They have little interest in curbing
China's overcapacity and instead should be supporting it. They do not
have to fight the battles like the USA and the West to help their
struggling companies doing business with and competing with China.
Anonymous