PUBLISHER’S NOTE: As the old saying goes, “Paybacks a Bitch.” China has got what it has wrought. The Communist nation that launched the COVID War in January 2020 on its Lunar New Year, “The Year of the Rat,” that destroyed the lives and livelihoods of billions across the globe… is hitting its creator the hardest. 

After three years of zero-COVID policy that sucked the joy and prosperity out of life—despite the foolish hymn that all the COVID warriors were humming that “It’ll come back”—neither the economy nor the pre-COVID War human spirit has “come back.”

A nation that had a skyrocketing economy from when it was brought into the World Trade Organization two decades ago, was already peaking, overbuilt and overblown before Beijing shot it in the heart with three years of draconian lockdown mandates. 

The Chinese future is bleak, as is the global economy. It’s in the numbers.

BEIJING ONCE AGAIN VOWS BOLD POLICIES TO STIMULATE THE ECONOMY

On 4 August, several Chinese government agencies and the central bank renewed their pledges to instigate bold and more carefully targeted policies to revive the country’s stagnant economy.

Recently, officials launched a variety of measures, including looser regulations and lower interest rates, to spur growth in various industries, in consumer spending, and to spark growth in jobs and workers’ incomes.

The new measures are expected to return China’s economy to a meaningful level of growth in this year’s second half, officials said.

“We will place steady growth in a more prominent position, implement macroeconomic policies in a more precise and forceful manner, and step up efforts to expand domestic demand, elevate confidence, and prevent risks,” Yuan Da, an official of the National Development and Reform Commission, told a press briefing last week.

The new policies will address six areas, Da said:

• helping people buy their first home or improve their housing situation;
• expanding active investment;
• reducing businesses’ “burdens”;
• improving the business climate and stabilizing foreign trade;
• expanding the middle class;
• ensuring jobs for “key groups.”

“The recently released policies are stronger than expected—for example, easing restrictions on people wanting to buy a second house, measures to support private firms, and invigorate the capital market,” economist Chen Fengying told the state-controlled Global Times newspaper.

On 4 August, China’s central bank chief met with officials of several private firms to collect ideas for policies that would strengthen their financial position, the GT reported.

TREND FORECAST: China’s economic malaise finally seems to have snapped officials out of the idea that modest tweaks to policies will reinvigorate GDP.

However, launching new “forceful” policies is likely to run into roadblocks. President Xi Jinping has consolidated power and has shown his taste for strict controls and regulation.

The true test of the new stimulus plan will be whether consumers are inspired to spend or will continue to save, hewing not only to a cultural tradition of thrift but also remaining gun-shy after three years of extreme and sudden lockdowns and mandates.

Chinese citizens have come to see the government as heavy-handed and capricious, giving or taking away based on whim. Bold policy measures will have to remain in place unchanged for some period before the bulk of the population is ready to open their wallets.

TOP TREND 2022, SELF-SUFFICIENT ECONOMIES: CHINA’S FOREIGN INVESTMENT NEARS RECORD

During the first half of this year, China invested more than $10 billion in mining and metals ventures outside of its borders, mainly in Africa, Asia, and South America, according to a report from Fudan University’s Green Finance & Development Center.

That amount is more than China’s total outside investment in the sector in 2022 and is on the way to surpassing 2018’s record of $17 billion.

The investments put money into copper, iron ore, lithium, nickel, steel, and uranium, continuing the country’s drive to lock up mineral sources to support manufacturing, particularly in its thriving green energy industry, for which it hopes to remain the global hub in years ahead.

The investments are part of China’s Belt and Road Initiative (BRI), begun in 2013, which scattered as much as $1 trillion across development projects in 148 nations, Christoph Nedopil, director of the Fudan center, told the Financial Times.

However, these new investments are more strategic in their economic and industrial focus than many previous ones, he noted.

China’s growing portfolio of raw materials around the globe complements a growing domestic processing industry for aluminum, cobalt, copper, and lithium, further reducing reliance on foreign contractors.

This year’s first half is the first such period in which BRI investments in mining and minerals exceeded those in construction of ports, medical centers, and other infrastructure in developing nations, Fudan’s report noted.

A significant number of BRI projects were mismanaged and lost money. As a result, new investments are expected to bring in revenue or lock down future resources, Nedopil said.

TRENDPOST: China continues its unbroken march across the world’s economic landscape, forging alliances and making deals with countries rich in minerals and other natural resources. The ability to do so is one advantage of having a central government that takes a strong hand in using industrial policy to guide the economy.

Meanwhile, the U.S. is focused on keeping Ukraine from disappearing from the world map.

As Gerald Celente often says, “The business of China is business; the business of the U.S. is war.”

CHINA’S FOREIGN TOURISTS DISAPPEAR

China welcomed a scant 52,000 foreign tourists in this year’s first quarter, compared to 3.7 million in the same period of 2019, government figures show.

Even worse, fully half of those visitors came from Taiwan or the Chinese-ruled territories of Macau and Hong Kong instead of Europe, the U.S. or other areas more distant.

During the period, leisure visitors from North America numbered about 40 percent as many as in 2019’s first quarter, travel company Mondee Holdings said.

Fewer visits by foreigners means fewer people outside China become familiar with the country and its people, a lack that can aggravate tensions between China and the rest of the world, The Wall Street Journal said.

In significant part, it is those tensions between China and the West that keeps foreign visitors at bay, tourism experts told the WSJ.

In June, the U.S. state department warned tourists to stay away from China due to the danger of being wrongfully detained and the “arbitrary enforcement of local laws.” 

The loss of pleasure travelers was accompanied by a loss of foreign direct investment: down 80 percent to $20 billion in this year’s first quarter from $100 billion in the same period last year, research firm Rhodium Group reported.

“Companies are very, very concerned about their people going to China,” partner Dan Harris of law firm Harris Bricken, which advises businesses on investments in China, told the WSJ.

“Why wouldn’t they be?” he added, citing incidents such as government raids on the China offices of Bain & Co. and other foreign businesses. “People are not going to China unless they have to.”

TREND FORECAST: The lack of visitors and foreign capital is a symptom of China’s larger economic stagnation. GDP grew less than 1 percent in this year’s second quarter, youth unemployment is at record levels, and consumers are hoarding cash instead of spending. As we have detailed, the COVID WAR sucked the joy out of life… not only in China but much of the world. Life is not what it used to be. And those that are young and did not know what it was before the COVID War will not have the spirit, knowledge or desire to live life the way it used to be.