German media: 6 facts indicate that "China's collapse" is purely delusional, while the White House gloating article | "China's collapse" is purely delusional | 6 facts indicate that | the White House
On August 18th, the website of the German magazine Focus published an article titled "Six facts indicate that the collapse of China is purely a delusion", authored by Gabor Steingart. The article is compiled as follows:
Politicians in the White House are already gloating over the vulnerability of China's economic data. US President Biden referred to the Chinese economy as a ticking time bomb.
But this wish does not correspond to the actual situation. "It is absolutely too early to criticize the Chinese economy. The country has a strong and still growing technology market. Although the economic recovery is weaker than many people expected, the economy is still expected to grow significantly this year," said Jurgen Matters, Director of the Regional Markets Department at the German Institute of Economics
The following concrete facts indicate that the "China collapse" is purely delusional:
1. China's economic growth rate is twice that of the United States
The International Monetary Fund predicts that China's real gross domestic product will grow by 5.2% in 2023 and 4.5% in 2024. China's GDP accounts for almost 18% of the global economic output. Even if the Chinese economy only grows by 3% in 2023, the increment will still exceed 500 billion US dollars.
2. The decline in imports is a sign of economic strength
In July 2023, in US dollars, China's imports decreased by 12.4% year-on-year, but the decline in imports is not necessarily bad news for China. Yurgen Matters said, "The Chinese government intends to focus on improving self-sufficiency to reduce dependence on the West."
Taking the automotive industry as an example, the Chinese government has launched an "electric vehicle offensive". In China, more and more people are choosing BYD instead of Volkswagen when buying private cars. In the first five months of this year, this market leading company far surpassed Western car brands in domestic electric vehicle sales.
3. China's innovation capability is increasing
The number of patent applications from the European Patent Office indicates that the creativity of Chinese people is increasing. In 2022, 19041 Chinese patents were registered in Europe, an increase of 15% compared to 2021.
4. China's footprint in Europe continues to expand
A latest study by the German Institute of Economics shows that Chinese goods are becoming increasingly important to the EU market. In 2000, the EU's imports from China accounted for 2.6% of the total EU imports. Last year, this proportion has increased to 8.8%.
Europeans mainly purchase computers and other electrical and optical equipment made in China. From 2000 to 2022, the proportion of such goods imported from China increased from 4.5% to 27.4%.
5. China holds a large amount of raw materials
Rare earths play a crucial role in the manufacturing of various electronic products. China controls nearly 70% of the production in the rare earth market. 34% of all rare earth elements in the world market are directly imported from China.
6. China has sufficient foreign exchange reserves
Foreign exchange reserves are a reflection of strength - and China's foreign exchange reserves are significantly higher than those of other industrial countries. Beijing has reserved 3.3 trillion US dollars for crisis response. Japan, which ranks second in foreign exchange reserves, only holds $1.3 trillion in reserves. As of the end of 2022, Germany's foreign exchange reserves were only about $300 billion.
In summary, even if the global economy enters a downturn, China remains the locomotive of the world economy.