All this is throwing Xi’s domestic strategies into disarray – perhaps permanently.
Six months ago, Beijing was throttling ahead with “Made in China 2025,” a multi-trillion-dollar effort to dominate the future of self-driving vehicles, renewable energy, robots and artificial intelligence. Party bigwigs were also planning festivities to commemorate the 40th anniversary of Deng’s reforms -– and Xi’s steps to accelerate them.
Now, Xi’s undivided attention is on making this year’s growth numbers. Trump’s trade-policy grenades are sending a few too many market forces Beijing’s way for comfort. China’s currency is down 6.4 percent this year. Shanghai stocks are down 22.3 percent this year as JPMorgan Chase and other investment banks turn cautious despite China’s 6.7 percent growth.
The headwinds heading China’s way are unmistakable, particularly with Trump threatening to up the tariff ante to $505 billion. In August, export growth weakened to just under 10 percent from the previous month — crisis levels for a trade-reliant developing nation. Fixed-asset investment has stalled, falling to a record low in August. And the latest purchasing managers’ data from the government and Caixin at right at the 50-point mark — just a small step from contraction.