Capitalism heads east, with its axis in China

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George Castro

International Analyst

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Goldman Sachs predicted a 3% annual increase in Chinese output for 2023, and it did so in January this year, and now he raised it to 5.5%, because he expects a significant increase in individual consumption, which would rise to 8.5% in the year.

USB (Switzerland) also raised its forecast by 4.9% in January this year, to 5.4% annually, because construction industry (“real estate”) has experienced exceptional growth over the past month, and its sales have surpassed 2022 levels in the People’s Republic’s top 30 cities by 30% or more.

This means that the 2019 guidelines would be achieved at the current pace by the end of 2023, when they would get the all-time record which was achieved 4 years ago.

The central figure in world terms of this situation is that the People’s Republic would grow between 5% and 6% or more this year, while the United States would face a recessionary crisis, and the same would happen in Europe, led by Germany , the fourth world power.

He Chinese consumption accounts for 60% of GDP (when it was 49% 10 years ago); and what happened in the last 10 days of January, during the “Spring Festival”, is very significant as regards what is coming in terms of consumption.

In this period, there were 308 million domestic tourist trips, which resulted in an increase of 23.1% compared to the previous year, and which is equivalent to 88.6% of the level reached in 2019, when there was a record absolute historian.

In that phase of the last 10 days of January, $55.620 million was spent, which implies a 30% increase compared to 2022 and represents 73.1% of the level achieved in 2019.

The most notable case is the one that occurred in Shanghai – China’s second city and its largest international face facing the world – in the past two months, when it fully recovered after being closed to deal with the coronavirus pandemic.

He Shutdown of Shanghai’s economy and society it was the root cause of China’s economy growing by only 3% last year, compared to the 5.5% level projected by the government and international organizations; and it is this situation that has now been overcome.

Shanghai received just 180,000 overseas travelers in January this year, compared to 2.7 million arriving through its five international airports in the same period of 2019, which is the usual average over the past 5 years.

This structural feature is what it made Shanghai the center of world consumption, including luxury, above New York and Paris; and now it is estimated that this phenomenal mass of foreign tourists will return in full force from May.

In short, Chinese consumption represented 55% of GDP in 2022 (which would rise to 60% this year); and then contributed to 65.4% of the production increase, a level that would be reached in May/June 2023, implying that from then on China is once again experiencing a global consumption boom.

For its part, the manufacturing industry reached an expansion index of 52.6 in February 2023, the highest in the last decade, and one and a half points above the level reached the previous month.

The “Caixin China General” index, which focuses on the performance of private companies and large multinationals, experienced its first expansion in 7 months in February, rising to 51.6, which directly affects the People’s Republic’s international trade led by the manufacturing industry, and which reached $6.1 trillion last year, an all-time record.

The calculation to be made is as follows: China would import at this level of foreign trade increase more than 40 billion US dollars over the next 15 years (30 billion dollars in goods and 10 billion dollars in services); and this year would contribute 38% of the total increase in the world economy (the US contributes 15%); And this happens when the People’s Republic has become the main trading partner of 144 countries of the world out of the 192 represented at the United Nations.

This implies, in short, that the transfer of the axis of the world economy from the West to Asia is accelerating and deepeningwhich is unequivocally the central tendency of the time, the one that determines all others.

This structural fact that characterizes this phase of world history is what it irreversibly undermines US hegemony in the global systemwhich corresponds to a cycle that ended in 2008/2009, when the international financial crisis occurred with its epicenter on Wall Street.

History is not deterministic, but there is a determinism in history. What is essential is politics – the “Kingdom of Freedom”, according to Hegel – where will, initiative and the genius of leadership reign., but the profound determinism of time is what establishes the framework of possibilities and impossibilities for the action of politics; and this determinism is inevitably oriented towards the East, and above all towards the “Middle Empire” with 5,000 years of history, which is China.

Source: Clarin

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