What is the hidden cost of China's industrial ambition?
Zahra Fakhri.
Why does China, despite being aware of weak domestic demand and the structural problems of its economy, still insist on increasing production and investment?
Beijing's strategy is based on the assumption that the development of advanced industries, increasing productivity and strengthening the power of technology will ultimately lead to an increase in income and an increase in household consumption. But this path does not always go as expected.
When the production capacity exceeds the local demand, the surplus goods find their way to foreign markets; This too with pressure on prices and the possibility of increased trade tensions. At the same time, the drop in prices may put pressure on the profitability of companies, investments and the labor market.
In this video we discuss China's economic strategy and the consequences of continuing on this path.
The official channel of Donya Akhtaz newspaper.