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Chinese manufacturers will have to find some country, somewhere, that has a GDP roughly comparable to the USA, a growing middle class of hundreds of millions of people, and room to shift from savings to consumption.
The effects you highlight are real and interesting, but the country that will absorb most of the displaced exports is China itself. And that is going to be difficult and straining, even destabilizing.
And questionable. I agree it would be the ideal solution for China, but it runs into the issue of the implications of the Chinese property market earlier this decade: the population does not have the room to shift from savings to consumption, due to the literal rooms the household savings were being invested in falling out due to the property crisis.
This was an economic issue that was particularly affecting the middle-class, which had the spare money to try and invest. Hence the relevant policy decision during the post-COVID period to double-down on export-led growth post-COVID, which has somewhat contributed to already-ongoing deflationary pressures that will get worse if no-longer-exported products further suppress prices, feeding into the 'prices will keep going down, might as well hold out' dynamic that creates deflationary spirals.
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Right. Trump boosters don’t seem to understand that these tariffs, while recessionary, aren’t going to destroy the Chinese economy. The CCP is already embarking on an extensive plan to fuel domestic consumption. It may well succeed. The economies of South and Southeast Asia are still rapidly industrializing and buying Chinese machinery and cars. China itself is still getting richer.
Most importantly of all, the Chinese have suffered extreme hardship within living memory. Even 25 years ago, they were poorer than any American has been in a long time. The CCP can survive. Americans haven’t suffered true hardship in a century. They haven’t suffered geopolitical humiliation in 200 years. They aren’t prepared. The political system is much more fragile.
Sure, the US losing global hegemony means the end of the US, at least in practice(I would consider federal state failure to be the end of the US if not resolved in <5 years). But does the US actually stand in danger of losing global hegemony? Europe and Japan and SK know they can't go it alone(although they plausibly could if they stand together without the US, but who's going to coordinate that). Avoiding having to kowtow before Russia/China may be more valuable than whatever it is Trump demands.
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