Essay: China's economic decline will contribute to Russia's decline

The flag of Russia

Chinese Economic Collapse is Russia’s Downfall, Interview with Volodymyr Ludovskyy PhD, Professor of Economics, Indiana University, 9-12-2023

Before the outbreak of Russia's invasion of Ukraine, China promised to back Russia “eternally”. However, China’s economy is now on the precipice – and it might take Russia down with it. China is facing a variety of factors that are strangling it: Youth unemployment of over 20%, more citizens seeking to leave, and a debt situation that has grown out of control.^[1]

Unfortunately for Moscow, their strongest economic partner’s economy is falling apart.^[2] See also: Russia's economy and gas and oil profits will be BADLY damaged when China's economy declines

Hindustan Times: China's Xi Jingping helped Russia Dampen Western Sanctions Impact as there was a 400% increase in Chinese loans to Russia. But how long can China afford to do this?

1 Will China's economic problems influence their foreign policy towards Russia?
2 Will China experience lost decades of economic stagnation like Japan? Will China face long term economic decline?
3 Russia's share of the world's economy is projected to shrink by 2028
4 Will China's and Russia's upcoming woes make it easier for the USA to compete against China and Russia in terms of economic competition and geopolitics?
- 4.1 Chinese property woes trigger a ‘dramatic shift’ into US stocks
- 4.2 The United States will likely be the leading power in the world for the foreseeable future
5 User: Conservative's Geopolitical essays
- 5.1 General
6 See also
7 References

Will China's economic problems influence their foreign policy towards Russia?

Flag of China

In August 2023, The Diplomat indicated:

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The Chinese economy is in trouble. Weak investment and consumer spending – what some have termed a “general erosion of public faith” – is compounding other, structural problems in the Chinese economy. A China-led global slowdown or recession may hit commodity exporters, including Russia, relatively hard while leaving other, less China-dependent economies relatively unscathed.

China’s economic stumbles may also have significant geopolitical consequences, as governments of all types tend to scale back foreign policy ambitions amid economic difficulties. Concretely, China’s economic weakness may incentivize Beijing to play a more active role in pressuring Russia to enter negotiations over the war. Still, while Beijing may dial back its support for Moscow’s war due to domestic economic considerations, China’s pro-Russia tilt will nevertheless persist.

The signs of a sharp Chinese economic slowdown are everywhere. Official data shows that consumer prices dropped 0.3 percent last month, potentially signaling China’s descent into a Japan-style deflationary spiral. Imports and exports are slumping, and anecdotal but compelling evidence suggests Chinese consumers have fallen into a “psycho-political funk” amid concerns over black swan events like a future invasion of Taiwan or a real estate collapse.

These real-time indicators are of little surprise to long-time observers of the Chinese economy. Some analysts have been warning for over a decade that China’s excessive reliance on debt would ultimately leave it with few good options, while recent gold-standard studies have warned that economic growth of 1-3 percent is achievable in the medium term – but only if China undertakes major structural reforms. China’s bill for decades of economic mismanagement, including historic misallocations of investment, surging debt loads, unfavorable demographics from Mao-era policies, and repressed consumption, is coming due.

There are signs that domestic economic difficulties are compelling Beijing to adopt a softer foreign policy...

China’s slumping economy is likely curbing many of its foreign policy ambitions and prompting a rethink of its policy toward the Russian invasion of Ukraine. Still, a systematic transformation of Beijing’s perspective on Ukraine or other key foreign policy matters is unlikely. Xi shares Moscow’s anti-Western hostility; demonstrates a very shaky grasp of economics, limiting his understanding of the scope of China’s domestic problems; and presides over a system that does not make major self-corrections easily. Xi may dial back China’s pro-Russia neutrality, but only reluctantly and partially.^[3]

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Will China experience lost decades of economic stagnation like Japan? Will China face long term economic decline?

The flag of Japan

Japan, an ally of the United States, may be turning the corner in terms of its decades-long deflation battle

Just as China faces a Japan-style ‘lost decade,’ Japan thinks it’s near a ‘turning point’ in decades-long deflation battle (Japan is an ally of the United States)

Russia's share of the world's economy is projected to shrink by 2028

The article Is Russia the World’s 5th Largest Economy in GDP, PPP? indicates:

“

But what if we were to look ahead? How would Russia fare in the ranking of Europe’s and the world’s largest economies in the future? Again, we consulted the IMF, whose estimates go to 2028. These estimates show that in 2028 Russia’s share in the world’s GDP, PPP, in constant dollars will shrink, making it seventh among the countries with the largest shares in the world’s GDP. The IMF predicts that Russia’s share in the world’s GDP will decline from 2.92% in 2022 to 2.58% in 2028 (see Table 4), a decrease of 11.64%.^[4]

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Will China's and Russia's upcoming woes make it easier for the USA to compete against China and Russia in terms of economic competition and geopolitics?

Chinese property woes trigger a ‘dramatic shift’ into US stocks

Chinese property woes trigger a ‘dramatic shift’ into US stocks - Financial Times, 9-12-2023

The United States will likely be the leading power in the world for the foreseeable future

Question: Will China's and Russia's upcoming woes make it easier for the USA to compete against China and Russia in terms of economic competition and geopolitics? See: The United States will be the leading power in the world for the foreseeable future