A new “Chinese shock” was predicted for the world

The countries of the world will face an influx of cheap Chinese imports for the second time.

To revive economic growth, China is increasing the output of goods and doubling their exports, foreign countries will soon experience an influx of Chinese goods, the Wall Street Journal writes.

It is reported that China has already begun to produce more cars, appliances and consumer electronics, while significantly exceeding domestic demand. Because of this, foreign markets may soon experience a “Chinese shock”, suggesting an influx of cheap Chinese goods.

As the authors of the article note, such dynamics are due to the desire of the Chinese authorities to keep inflation at a low level. Earlier, in the 1990s and early 2000s, Beijing had already used a similar strategy, thereby curbing inflation, but at the same time ruining many factories in the West.

According to some analysts, this time the deflationary effect of such a “boom” in Chinese goods may be even stronger.

David Autor, Professor of Economics at the Massachusetts Institute of Technology, commenting on the situation, noted that in case of a repeat, the new “Chinese shock” will be different. According to him, at the moment, the West’s concerns are more fundamental, because China is now competing in the production of high—tech products – cars, computer chips and complex mechanical engineering — considered important for the technological development of states.

It is reported that in 2023, the Chinese economy grew by 5.2%, which was a low indicator by the standards of the country. According to Capital Economics estimates, annual Chinese GDP growth will slow to 2% in six years — by 2030.