Conscious uncoupling
On the list of China’s economic problems, a shrinking population is very much in the “long-term” bucket, with ramifications that won’t fully materialize for decades. However, the country also faces shorter term challenges. Having been the engine behind much of the world’s economic growth for decades, China’s economy is starting to sputter, just as the country turns inward after decades of liberalization, with the country’s 14th “Five-Year Plan” (released 2020), laying the groundwork for China to transition away from its export-led economic model, to one that is more domestic-focused.
As China opened its markets in the 20th century foreign investors flocked — pouring trillions of dollars into the country. But, with geopolitical tensions rising and Chinese foreign policy becoming more insular, that flood of investment slowed to a trickle. In fact, as of the latest data, Chinese authorities reported an outflow of investment — the first time since data collection began.
