Gordon Chang on China's Unbalanced Economy and Xi Jinping's Ideological Goals

Treasury Secretary's Concerns on China's Economy

• ⚠️ Treasury Secretary Scott Besson stated that China's current economic model, built on exports, is unsustainable and harming both China and the world.
• 🎯 Besson emphasized the need for China to rebalance its economy, noting that the U.S. also requires rebalancing.

Xi Jinping's Ideological Economic Strategy

• 📉 Gordon Chang explains that China's consumption accounts for a low 38-39% of its GDP, a figure Xi Jinping intentionally wants to keep low.
• 💡 This strategy goes against empowering the consumer, which is contrary to Communist Party ideology.
• ⚙️ It also serves Xi's goals of developing a war economy and maintaining incentives for the Chinese banking system and Communist Party loyalists.

Challenges to Rebalancing

• 💔 Chang believes that Xi Jinping holds these economic principles very close, making it unlikely that the U.S. can influence him to change course.
• 🚫 Consequently, if any trade deal is predicated on a rebalancing of the Chinese economy, Chang is skeptical of its feasibility.