China’s economic woes have signaled turbulence for the global economy at large in the form of slowing growth. Where is the Chinese economy headed and how can officials set their ship back on course?
Former Prime Minister of Australia Kevin Rudd — currently the Ambassador of Australia to the US — joins Yahoo Finance’s Akiko Fujita at the 2024 Milken Conference to outline China’s problem areas in the private sector, notably its real estate industry, and easing consumer confidence.
“The problem that we see in the Chinese economy writ large at the moment, is a problem on the demand side of the economy, not a problem on the supply side. Whereas the government response in Beijing seems to be to double down on the supply side, whether it’s through manufacturing, advanced manufacturing, advanced technology,” Ambassador Rudd explains. “What the regime talks about in terms of the new advanced productive forces, that’s all fine and dandy, but actually doesn’t go to the fundamental to the problem which is how do you produce sustainable increases in long-term, domestic consumption.”
“And when consumers are lacking confidence for the reasons we ran through before, it doesn’t fix the challenge. So I’m a little concerned about China’s medium-term growth trajectory for those reasons.”
Ambassador Rudd highlights China’s industrial policy as overseas manufacturers ramp up production on electric vehicles (EVs), electronic devices, and semiconductors to compete against American counterparts.
“It’s often said that what China lacks on the semiconductor speed front, the great race for nanometers, that China has an abundance with the availability of data, also the size of its population. And there’s some truth in that,” Ambassador Rudd says about AI and data collection in China.
Catch more of Yahoo Finance’s coverage at the 2024 Milken Institute Global Conference.
This post was written by Luke Carberry Mogan.
