Which policies? I thought the primary cause was the demographics changes which is creating knock on effects, rather than the party's policies specifically.
Not really. Yes, China is starting to experience demographic decline but it will be a long long time before it affects them economically. They could still absorb every North American job and still have people left over. That's just how big China's population is. Demographic decline will eventually bite them but they have a very long runway. China is very different from Japan's case.
As for policies, again, not really. It's more that about 10 years ago most low cost manufacturing shifted out of China because cheaper regions caught up and were able to provide better value. China has been been talking about this trend since before Xi and a big focus has be shifting to a service economy built on internal demand. This is the part where policies come into play. The shift has not gone as well as they hoped. And again, it's not really about Xi messing up Deng's work. The world, and China, is different from Deng's world. Deng's approach would not work in a world where low cost manufacturing has moved overseas. If anything, it's more of an issue that Xi has stuck to closely to Deng's approach and not adapted to the changing world.
no, but the next step, which is to mimick what japan did post lost-decade, is to move into higher value manufacturing, increase automation and increase domestic service industry.
However, the required tech, research cooperation and transfers that would've been needed is going to need deep trust and cooperation between the west and china - that entails giving up the full authoritarian control of the economy. This isn't something the CCP can entertain, unlike japan.
China still has ambitions of becoming a superpower that can dictate terms on the world stage. I think this is the difference between Xi and Deng. Xi cannot move past being second fiddle. And i think this is the real cause for china's downfall (if it were to happen).
If you're a absolute lowest-value-add manufacturer (think cereal box toys), yeah, you could put that anywhere plastic stock could be delivered. But as you start to make more sophisticated products, supply chains get way more relevant. If your cereal box toy acquires a blinking LED, a coin cell battery, and a screw to hold the battery box closed, it becomes compelling to manufacture the main casting in China because all the other parts are already made there and the logistics will be cheaper and more responsive.
This seems like the same play as early Silicon Valley, and Taiwan in the era of early PC clones.
When you're that big, politically, militarily, economically, you need to be able to "clear your orbit" of other territories that could smash into you. It might be direct military involvement, or aggressive economic intervention (Belt and Road)
Was this where Japan stumbled? They were militarily neutered after WWII and largely subject to US political whims-- did that restrict their ability to prevent Taiwan and Korea from stealing their economic thunder?
which is a question framed from a zero-sum game.
The world isn't zero sum. The idea is that the "stolen" economic opportunities would've been there for the japanese had it not been "stolen" is wrong. It's like saying that a pirated piece of music is a stolen sale.
The fact is, japan's output didn't drop - the new asian tiger economy of south korea and taiwan caught up. The world is richer because of it, even if the japanese didn't get to own a share of that wealth directly, they can benefit indirectly.
I suppose china learnt the wrong lesson from this perspective observing japan. They do wish to prevent anyone else from stealing their thunder, and they are taking action right now for this purpose. And it is this very action that's causing the tension in asian pacific.
Imagine if in an alternative world, the US did not invite china into the WTO, and worked to integrate them into global trade? If the US had held such a belief that the world was zero sum, china would not have had the opportunity to get foreign investment and become the manufacturing powerhouse it currently is today.
And yet china cannot see how folly their current behaviour is, and insist on pursuing a geopolitical agenda that involve expansionism and coercion of their neighbours, rather than tight economic cooperation and integration.
The chipmaking-gear sanctions are both about enforcing a dependency on an independent Taiwan via TSMC, and keeping the PRC from being more militarily and economically self-sufficient.
The ZTE and Huawei bans were less about security and more about cutting off a place where they had effectively undercut the Western competition. There was no hoop they could have jumped through that would have convinced regulators their gear was safe-- the fix was in from day one. We're seeing the same thing with TikTok now.
It's easy to see a message of "we like you when you're making our cereal box toys, but don't get near our high value premium economic development" in those actions.
> The world is richer because of it, even if the japanese didn't get to own a share of that wealth directly
Japan, SK and Taiwan are all export economies, they import energy, build sophisticated products in more or less similar industries, export them and punch way above their weight on the list of world's top exporters. If Hyundai grabs a chunk of Toyota's market around the world, and Samsung replaces Sony, that is a direct loss for the Japanese with no "indirect benefits" in sight.