The presence of the pandemic on Chinese soil with the simultaneous expansion of the US-China trade war, which has now turned into a technological, investment and financial war respectively, has been an explosive cocktail that has begun to leave its mark on the Chinese economy.
The sharp decline in foreign direct investment in China and fears that it will continue due to the passage of a specific Hong Kong bill that leaves ambiguities as to how a foreign investment can be characterized is one of these signs. The exclusion of giant Chinese technology companies from Western markets is another of these signs.
At the same time, both the EU, the UK, and the US, as well as Canada and Australia, are experiencing an alarming and vigilant climate against any Chinese direct investment in their markets.
The instrumentalization of laws in these markets will be the main “weapons” of the West to prevent the acquisition of Western companies by Chinese companies that are funded and subsidized by the Chinese state.
Despite these obstacles, China has managed to prevent the spread of the epidemic on its soil in the first two months of the crisis by imposing harsh repressive measures, with the Chinese economy today being more optimistic that after the first three months of the year to come out almost unscathed from the general character of lockdown measures.
China continues its growth path unstoppably, avoiding a recession as expected in most developed economies around the world.
The US economy is expected to show a recession but growth from Q42020. The global economy is expected to decline. The forecast models of Trust Economics expect Chinese GDP to move to 4% per year for 2020.
Despite the problems and obstacles on the Chinese economy’s growth path, its huge market size and steady increase in the disposable income of Chinese citizens make it the first investment destination for foreign companies that want to extract as much as possible of their share from this huge market.
Despite the US-China trade war, we anticipate that both European and American companies have huge interests in the Chinese market and are not going to get rid of them.
The most classic example is Apple, the American technology giant, which is primarily interested in its cathedral in the Chinese market and then in all other markets in the world. Sales of US businesses in China are approaching $480 billion. A gigantic amount that shows the attractiveness of the Chinese market.
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