China Economic Spotlight

President Xi is concerned about growing wealth and income inequality in China. The Evergrande crisis could nevertheless challenge his determination to address this inequality, a considerable portion of which has been fueled by rising wealth disparities in the housing sector.

Although China’s “Big 4” state banks remain focused on supporting domestic Chinese growth and consumption for now, they are also increasingly active across international borders. Their global expansion could seriously challenge the primacy of Western banks and may thus have geopolitical reverberations.

On September 24th China’s giant property developer Evergrande Group entered a 30-day grace period before being declared in default. Although they may not default, this slowdown highlights the key contradiction in China’s policy goals.

The market uncertainty around China’s teetering property giant is decidedly political, a reflection of President Xi Jinping’s shifting policies.

China’s total merchandise trade with Sub-Saharan Africa has increased by 1864% since 2001. Its increased presence in the region not only increases its access and influence, but also poses significant economic and security risks for the US and EU.

By invoking national security to rein in Didi Global, China has substantially complicated matters for its companies listing overseas—and their investors.

In recent years Chinese investment in Sub-Saharan Africa has outpaced distributions by the World Bank Group by more than $20 billion USD. These investments have been focused in energy, transport, metals, and real estate imply a modern bartering system is at play where developing countries in these regions pay for Chinese investment and construction in their economies through guaranteed long-term supply of hydrocarbons, agriproducts, or minerals.

The rapid revisions to US FDI and trade policy and the fast momentum the United States has helped to create in its diplomatic efforts reflect a near uniform consensus in the United States, and a growing consensus among our allies, that cross-border trade and investment are squarely issues of national security. Traditional US transatlantic allies appear to be serving US interests, and other countries with complex relations with China are adopting FDI screening processes that mimic CFIUS. The numerous efforts to revise statutory and regulatory regimes are an unmistakable signal that the view of China as a rival, and indeed a threat, to the established global order, is both widespread and likely to endure.