Today, John, Les, and Special Guest Dinny McMahon—Head of China Markets Research at Trivium—trace the rise and slow-motion collapse of China's old economic model, and the technology and export-led manufacturing behemoth replacing it. For decades, China's economy ran on a simple engine: a high-debt construction and investment boom with real estate at the core and as the primary store of middle-class wealth. As Xi consolidated political power and began deflating the property bubble, he charted a new economic model featuring export driven growth and a high-tech industrial policy fueled by hyper competition—sparking today’s high stakes clash with the U.S. and Europe.
Can Xi's new economic model actually replace the prosperity that the property collapse destroyed? Why has Beijing continued to suppress consumption and what would it take for Chinese households to start spending? How should Washington be responding to a system that exploits global markets as we try to re-shore industry, de-risk supply chains, and compete for the frontiers of advanced technology? Are the flying cars we were promised finally here?!
Check out the answers to these questions and more in this episode of Fault Lines.
@lestermunson
@johnclipsey
@DinnyMcMahon
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