Absolutely fascinating article from a self-admitted Leftie about industrial policy in China. The author dances around the implication that this will stimulate major changes elsewhere in the world. The situation in a word is over-production.
China’s industrial policy has an unprofitability problem
But at the same time as China’s car manufacturers are beginning to dominate the world, most cars made in China remain in China – the Chinese internal market is that large.
As China’s internal demand begins to level off and the pressure to export more grows, this will clearly be very bad news for Germany, South Korea, and Japan – not that Germany needs any more bad news!
The implication is that – if China succeeds in maintaining its production by increasing exports – consumers in the West may benefit from lower prices … but workers in the West will be hurt by lost jobs.
There is also the issue of how China is going to prevent increased unemployment (and consequent social disruption) when China’s unprofitable companies begin to consolidate. Perhaps China will follow the path of the West, and increase military production as an alternative; they could also increase the size of their armies to mop up unemployment.
The implications make me glad I am old, and won’t have to see the consequences!