Across the media for years now, the story about China has focused on their strength and how they are the next big rulers of the world. The person writing this has written several such articles, and for good reason. The Chinese, amid global economic issues, have managed to stave off total disaster in their own country. They even avoided the 2008 recession for the most part and came out of it prosperous. But now China might be hitting their own wall economically.
Retailers and manufacturers in America say Chinese companies are flooding the country with cheap mattresses, among other materials, despite repeated U.S. demands to stop. This, in turn, leads to selling the mattress for less, which means less profits, which means ditching products or even cutting jobs.
China expert Gordon Chang says this is the result of a lack of economic stimulation within China and is even a predatory attack.
"These items are piling up on shelves in China...so the only option is to dump them on foreign markets," he says. "They are doing the same with heavy industry good as well...this is a problem. They are not willing to stimulate consumption at home, so they have to dump them abroad."
The fight against China doing such stems back to even 2019, when regulators began imposing substantial antidumping duties on mattresses from China, and other Chinese allies.
They are hitting the wall the U.S. hit in 2008, and now their only solution is dumping product elsewhere. It will be an expected thing from President Xi Jinping moving forward, too.
"He believes his only way out is to cause crisis abroad...to prevent other Chinese senior officials from challenging him...this is a problem he created because he does not allow domestic consumption," he says. "He thinks creating a crisis abroad can solve his problems at home."
The Chinese were able to navigate the problems of this century by overbuilding their economy, and now have tons of debt to pay back. The wall has been hit, and they are having their 2008 crisis. But that makes things all the more dangerous.
"China is vulnerable and not nearly as strong as it appears...but now, Xi Jinping has domestic incentives to create problems abroad," he says.
While it is not a direct missile attack or anything, it is a bit of a slow burn in terms of predatory attacks. Give it time, keep dumping the product, and other businesses will begin to hurt. That could cause big issues here at home, and there is only one real solution.
"American businesses will close...and the only way to stop it is to impose higher tariffs...this will at least protect industry from predatory competition...we either defend out companies, or we are going to lose them," says Chang.
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