China’s Export Abyss

The Chinese government desperately needs the world to accept Chinese exports, otherwise it faces the horror of having to empower the Chinese people to secure economic growth. Welcome to China Uncensored, I’m Chris Chappell. Just a reminder that we’re in Operation Honey Pot phase 2. Remember to watch this video to the end and leave a like and honey pot comment. Chinese products are everywhere. From components in your smartphone, to the plastic in your home — and bodies. Yay, microplastics — to the tomatoes in your puree and the cotton in your clothes. There’s even a good chance that those last two come with the added comfort and flavor of slave labor. You can really taste and feel the crushing inhumanity, but it’s totally worth saving a few cents! But Chinese products are not just *in* everything, sometimes they *are* everything! Like the huge e-commerce platforms of Shein and Temu, the vast majority of whose goods come from China. Then there are Chinese mega retailers like this China Square store in Kenya that’s ready to meet all your needs with products made in China. We have stores full of cheap crap like this in America, only we call them Walmart. For almost half a century now, China has been constantly upping its exports to fuel its growth and prosperity. After the Chinese government opened up the economy in the late 1970s, foreign companies soon came to dominate Chinese trade, as they took advantage of low production costs to have their goods manufactured in China and then shipped from there to their customer base. Over the decades, though, things shifted, and today, Chinese companies are behind most of China’s exports. The catastrophic dip in quality over this time is just a coincidence, I’m sure. These exports have grown exponentially, from just $14 billion in 1979 to more than $3.5 trillion in 2023, driving the economy from insignificance in 1980 to a modern behemoth, second only to the US economy, that accounts for 14 percent of global exports. They really put their stamp on the globe. And since it’s a Chinese stamp, there’s a good chance it could be toxic. But the export-led growth model that has enabled China to soar is now threatening to drag it to the bottom.You see, as other growth drivers like infrastructure expansion and the construction boom have run out of steam, the Chinese Communist Party has instead doubled down on manufacturing and exports to sustain its annual growth targets of around five percent. Surely this is a great idea that won’t have any unintended consequences. Fooooooooreshadowing! And it’s no longer about just exporting natural resources and simple products, like it was in the beginning. Today, Chinese companies dominate all sorts of high-tech areas, such as the commercial drone market. The number of their aerial devices around the world sure has ballooned. Civilian balloons, they swear. They also produce more electric vehicles than anyone else, and they’re disrupting global tech markets with their AI systems. And you can tell how good the quality is because instead of “revolutionizing”, it’s described as “disrupting.” Just don’t ask where their AI got its data. But while China’s initial low tech goods raised few eyebrows, the export of high tech products have sparked major concerns about the risks of surveillance, data security, and risky dependence, at a time when the Chinese government is pursuing goals that directly clash with the interests of democracies around the world. As a result, the West has placed tariffs and bans on Chinese high tech exports, from electric vehicles… to social media platforms. And maybe soon balloons. Civilian balloons, they swear. That makes it much more difficult for China to keep up its economic growth by relying on exports, which has been the plan for years. On top of that, the Chinese export model is made for an open world where goods and services can move freely, and everyone trades with everyone. I know: who would have thought communists would go for a plan that looks good on paper but is completely impractical in execution. Today, global trade is changing, as more and more countries are looking to nearshore and friendshore their supply chains, while a returned President Trump in the White House has gone tariff happy on everyone and everything – including China. He may even start putting tariffs on China dishes and Brazilian waxes. No one is spared! So to compensate, Chinese companies have sought to diversify their exports in order to be less reliant on countries that fuss about silly stuff like CCP infiltration, economic coercion, and hostile takeovers. But a major problem for China is that with the size of its economy now, the world just isn’t big enough to absorb the massive amounts of goods it will need to pump out to reach the government’s growth targets. At the same time, Chinese mega stores like China Square, for example, demonstrate how local manufacturers have a tendency to die out, as they’re unable to compete with the cheap Chinese products spewed out by China’s much more modern industries – that also happen to be heavily subsidized by the Chinese state. I feel like they missed an opportunity by not calling China Square Great Wall Mart. And no matter where you are in the world, I think few countries will be interested in seeing their entire domestic manufacturing sector wiped out just so the CCP can get closer to its growth targets. So, given the state of the Chinese economy and the international environment, the Chinese government’s continued focus on exports risks creating a ton of debt and a massive oversupply, but with little growth to show for it. But I’m sure that won’t happen. Moooooore Fooooooooreshadowing! At this point in the story, there is both good news and bad news for the Chinese government. The good news is that there is another way to grow the Chinese economy. The bad news is that it requires the leadership to loosen its grip and cultivate the economic power of the Chinese people. You see, the Chinese growth model has not only resulted in a bloated export sector, it has also neglected the Chinese consumer. Globally, consumers are the primary drivers of economic growth. But that’s less the case in China, where household consumption makes up under 40 percent of its economic output, which is about 20 percentage points below the global average and even further from the nearly 70 percent in the US. Now that other sources of growth are drying up, though, Chinese leaders like second-in-command Li Qiang have said that the government will boost the purchasing power of the Chinese people. That sounds nice, but, so far, it’s mostly amounted to some local governments raising the minimum wage by between $10 and $30 a month. Booming economy, here we come! And the central government is offering subsidies for those willing to buy digital devices and home appliances – none of which really screams out economic power to the people. And it doesn’t change the fundamental issue, which is that although China as a country has grown wealthier and has cool high speed trains and stuff, wages remain low for the average Chinese person. And even lower for the slave laborers, but that’s another story. This is a deep strain on Chinese youth, who, despite being the most educated Chinese generation ever, are being particularly hit by the low wage environment of China’s ailing economy. As one young Chinese social media user put it in 2023: “Our salaries are benchmarked against that of Vietnam, but our productivity is chasing after that of the UK and the US.” To make matters worse, many Chinese consumers choose to put what little money they do have in the bank instead of in the cash register. Those silly people, not going along with the plans of the government that represents…the people! Communism for the win!So why aren’t people falling in line with the CCP’s growth plan? Well, it’s because the government’s economic focus so far has left few resources available to fund sectors like education and healthcare. So, many Chinese families need to cover these things themselves, pushing them to put a substantial part of their salary aside and leaving them with even less purchasing power. This burden falls heavily on the more than 500 million rural Chinese and the 300 million Chinese migrant workers who do not have access to urban government services and, therefore, need to cover even more expenses out of pocket. And that’s not even mentioning the vast amounts of money that Chinese people need to save every year if they want to have any hope of buying a home some day. Especially if they want one that isn’t in the middle of a freaking highway. To genuinely enable Chinese consumers to become the economic engine that they are in other countries, the Chinese government would have to direct more spending towards untangling Chinese people from costly everyday expenses. Or they would have to loosen their grip on the economy so that capital can flow freely through the hands of individuals. At the same time, it would also need to broaden government services to cover the rural and migrant population, too, so that their purchasing power can be boosted, as well. But unfortunately, it’s difficult to imagine a scenario where the CCP leadership fully commits to transforming China into a consumer economy. Right now, Chinese leader Xi Jinping and his inner circle hold tremendous power over the Chinese economy. They can pick sectors they want to see prosper and make sure billions of dollars are channelled their way, and they can unleash hell on those businesses they are unhappy with. If they were to tie down a lot more public funds in sectors like education and healthcare, that would give them less room to dictate economic policy. And they love dictating. They’re regular dictate-ors. At the same time, Xi seems to be outright ideologically opposed to the idea of spending too much on the Chinese people. While he has championed what he calls “common prosperity”, he has also lashed out at “welfarism”, which he has described as “populist policies of high welfare spending that create ‘lazy people’ who do not contribute to the economy”, and he has vowed to not raise appetites for welfare. Big “do not become addicted to water” energy there, Immortan Xi. Instead, he has called for the Chinese people to struggle. And while Xi has recognized the challenges facing the Chinese people from the so-called “three big mountains” – which are education, healthcare, and housing – his main way of addressing the matter has been by launching intense crackdowns and anti-corruption campaigns against every single one. That appears less like an attempt to provide more economic freedom for the Chinese people and more about asserting even more state control – Xi’s control. Besides, from his perspective, what if Chinese people use their newfound economic freedom to drive the economy in a direction that he doesn’t approve of? Like this wonderful Xi Jinping Pooh t-shrit available on our website chinauncensored.tv! or away from graphics showing Chinese missiles raining down on Taiwan. Who needs healthcare and education when you can have N64 graphics of war crimes? It’s unlikely that the CCP will take that risk. So, I guess that leaves us back at tsunami exports… But if the CCP must abandon the idea of a Chinese consumer economy and stick with exports, then perhaps it’s time to spice things up with some new, exciting pages to the Chinese export catalogue, including VR lessons from master Li Qiang himself and delicious amounts of whatever it is Xi is cooking with Putin. Hopefully, there aren’t that many microplastics in this dish. So I want to show you something really interesting. We’ve been doing Operation Honey Pot now for almost two months. While you guys have been saving the show by leaving likes and honey pot comments on each episode, we have been working behind the scenes on some pretty important stuff. I can’t talk about it publicly right now, but I hope it will help us get to the bottom of what’s going on at YouTube. As part of this, we looked back at the numbers, and it is shocking. This chart shows what China Uncensored’s views were at the end of 2024, compared to 2023 and 2022. As you can see, we lost more than 8 million views compared to previous years. But according to YouTube, this was totally normal. After YouTube started soft censoring this channel in early November, less than half of our episodes were above 100 thousand views. Now, after two months of Operation Honey Pot, more people are seeing our videos. Three-quarters of our episodes are now above 100 thousand views. And more of you, like margaret thompson, JF Gaddy Jr, kreeshanman, beatle rocket, and Rennoch, are telling me you’re actually seeing me in your feed again. But as Mr Pyrosonic points out, it’s still not normal compared to other channels. Which is a problem, because 75 percent of our views come from YouTube’s recommendations. But this is why I say that every one of you who does Operation Honey Pot is saving the show. So remember to click on China Uncensored videos in your recommended feed, watch my videos until the end, and leave a like and a honey pot comment. Once again, I’m Chris Chappell. Keep those honey pots flowing.