Page 181 - CW E-Magazine (30-1-2024)

Special Report

their overseas investment for over USA’s position is not bad, despite because of the real estate meltdown
a decade. Japan has been investing all the obvious problems, with an which impacted the spending power
more than both, but the annual in- expected real GDP growth of about of its middle class, fragile export,
vestment has not risen. Not surpris- 1.5 % in 2024 but what it hides is the youth unemployment, drop in inward
ingly in the aftermath of the global fact it is poised for exploit the AI-led foreign investments due to geopoli-
credit crisis, the safe haven has been disruption in the years to come since tics, as well as the scare created by
the US. It’s net flow inwards at the end it is the Mecca of innovation and Government actions against rivals
of 2023 could be around $18-trillion, home to most of large global tech and large businesses owners (includ-
whereas the other three big economies companies, which will rule the roost, ing its thriving tech sector) under
are net $6.4-trillion in aggregate. So, and by the adoption of AI tools to the guise of corruption and national
investments are being sucked from the boost productivity. That would make security issues. Slowdown was con-
world over by the ‘safe’ dollar and the up for the dilution of USA’s political firmed by the latest PMI for China,
‘safe’ country, thereby propping the influence in many parts of the world. which is 49, and an admission by Xi.
US economy which did not enter the Even North Korea openly threatening Despite the economy having deli-
year with strong fundamentals. But the USA with long range ICBMs was vered a trade surplus in 2023, China
US is leaving 2023 with a higher-than- unthinkable 40 years ago. USA’s is expected to slow down in 2024.
expected GDP growth rate, high capital technology influence is going to be Taiwan and the semi-conductor
inflows and a stock market propped up stupendous. diplomacy that it needs to balance bet-
by the ‘Magnificent Seven’ stocks. But ween their dangerous neighbour and
sucking of global investment flows by China, the nearest competitor for the US, are stories in themselves.
the US will have a detrimental impact supremacy is ‘reportedly’ set to grow Irrespective of what might happen in
on other nations in the medium term. at 4.7% in 2024 (probably less, as their Ukraine, China is unlikely to launch
stats are unreliable) and supported now an attack on Taiwan in 2024. China
GDP growth by Xi Jinping’s very recent public is lying in wait next door and will
Given the gloomy global PMI and admission of the serious challenges strike when the time is right and only
the falling net international flows, it faced by China. China, under Xi if required. As an ancient Chinese
is likely that global GDP will fall in Jinping, has sidestepped the Western war strategist, General Sun Tzu once
2024, but the fall will be cushioned version of capitalism, and is out to cre- said, “Whoever is first in the field
by falling inflation and interest rates ate a ‘one People’ (create all middle and awaits the coming of the enemy,
remaining flat in H1 2024 till the class, by uplifting the poor through will be fresh for the fight; whoever is
economic scene becomes clearer. higher wages and pride, and by castra- second in the field and has to hasten
Leaving aside the ultra-bearish and ting the upper class business owners to battle will arrive exhausted” and
overly optimistic estimates, the real in the guise of preventing corruption “The greatest victory is that which re-
growth in GDP of the world is likely and other excesses), ‘one Party’ (sub- quires no battle”. The Chinese might
to be around 2.7-2.9 %, compared suming all powers of the government, even try infiltrating Taiwan politi-
with the estimated 3.0% growth armed forces, police and judiciary) cally by influencing people through
in 2023 and much lower than the and ‘one Leader’ (who totally controls its ‘one family’ propaganda, while
average growth of 3.8% in this cen- the ‘one Party’ and the minds of the continuing to play to the gallery
tury. oECD countries are expected ‘one People’). This could lead to more within Mainland China. Therefore,
to deliver barely 1.3-1.4% growth, brutality, cover-ups, and eventual hal- the US will continue to face a tricky
on an average, with smaller ones in lucination by the leadership. This is situation thoughout 2024, alternating
the group like Costa Rica, Mexico, exemplified by one of the oft-repeated between sending olive branches and
Lithuania, etc. will do better, and messages of the propaganda machi- issuing threats to China, given the
bigger ones, like Italy, Germany, nery: “Under Mao the Chinese people strategic need to engage with as well
UK, and France, scraping the bot- stood up (zhanqilai); under Deng the as subjugate, if possible.
tom at 0.5-0.7% growth. Argentina Chinese people got rich (fuqilai); and
will remain sick. Asia will do well as under Xi the Chinese people are be- Japan, on the other hand, is going
a group. Special mention of China, coming stronger (qiangqilai).” to have another good year in 2024, on
India, Indonesia, Japan (for turning the back of a good 2023. The growth
the corner) and USA (the Big Boy) The opaque Chinese economy is could be in the region of 1.5%, beat-
are warranted. fraught with demand-side challenges ing inflation at last. A 3.8% nominal

Chemical Weekly January 30, 2024 181

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