The developed economies were worried last year about being swallowed up or overtaken by the fast-growing Chinese economy. Now, for a change, China is showing that it is not invincible and is posting trade deficits, inflation and slower GDP growth. It might be time for the worriers to start fretting about the slowing of the second-largest economy in the world and what problems that might entail for the rest of the world.
In the just-concluded National People's Congress, China's version of the parliament, Wen Jiabao, the premier, said China was aiming for just 7 per cent annual GDP growth during the next five-year plan, after posting double-digit growth for the past few years.
What the Chinese government wants in terms of economic growth it gets, or at least the data released confirm it. Cynics may think this is because the Chinese government manipulates the data, and there may in fact be an element of manipulation. Consider the fact that the sum of provincial GDP figures often do not tally with the GDP figures released for the national level for example. But it is also true that China is still very much a centrally planned and government-owned economy, and in such an economy,the government can control investments and other factors to produce the level of GDP that it wants.
The Chinese government seems genuinely tired of piling up exports to other countries and then using the resulting surplus of dollars to buy up US treasuries, allowing the US government to continue to run large deficits. China's latest five-year plan seeks to shift the economy decisively towards domestic consumption and promises to build 10 million affordable homes to stimulate the domestic economy and to try to curb runaway property prices.
China is probably just acknowledging the inevitable. Despite stock market excitement with monthly figures showing that US consumers are buying again, it seems unlikely that the debt-laden US consumer can come roaring back to consume in a big way. So demand is likely to be tepid for China's exports. Even more ominous, the rise of salaries in China and the appreciation of the Yuan mean that wages in China's eastern provinces are no longer low compared with the wages of other poor east Asian countries such as Indonesia, the Philippines and Vietnam. So the supply side also has problems.
At the strategic level, it is obvious that China's government has decided to grab the bull by the horns and try to switch to a consumption-driven rather than export-driven economy. There will no doubt be some challenges in the implementation, but the broad direction is clear enough. The world needs to get used to the switch.
Now that the China is not going to be hell-bent on exporting, the whining countries that used to receive these exports should be happy, right? Not necessarily. As in every game, there will be winners and losers. For example, Germany, the other export machine of the world, may not be that happy. The Germans were selling a lot of machine tools to the exporting factories of China and a lot of cars to those who made millions from thefactories. While Germany may find a way to benefit from the consumption-driven Chinese economy, too, the switch-over will present at least short-term problems for Germany.
One would think that the US, which is the largest market for most of China's exports and which is always accusing China of manipulating the yuan to make China's exports competitive, should be happy. Not necessarily. The US may be happy to receive less exports from China but may not be so happy if that means China has fewer dollars to fund the deficits of the US government. If the Chinese do not fund the yawning deficits of the US, the US government may have no choice but to raise taxes and cut spending, which it is loath to do.
As the Chinese economy slows and a switch to domestic consumption as a driver of economic growth takes place, the world must be prepared to continue listening to complaints about the behaviour of China's economy and government - only that this time the complaints will be about the slowing of the Chinese economy rather than its super growth.
business@thenational.ae
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From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
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Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Cricket World Cup League 2
UAE squad
Rahul Chopra (captain), Aayan Afzal Khan, Ali Naseer, Aryansh Sharma, Basil Hameed, Dhruv Parashar, Junaid Siddique, Muhammad Farooq, Muhammad Jawadullah, Muhammad Waseem, Omid Rahman, Rahul Bhatia, Tanish Suri, Vishnu Sukumaran, Vriitya Aravind
Fixtures
Friday, November 1 – Oman v UAE
Sunday, November 3 – UAE v Netherlands
Thursday, November 7 – UAE v Oman
Saturday, November 9 – Netherlands v UAE
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Prop idols
Girls full-contact rugby may be in its infancy in the Middle East, but there are already a number of role models for players to look up to.
Sophie Shams (Dubai Exiles mini, England sevens international)
An Emirati student who is blazing a trail in rugby. She first learnt the game at Dubai Exiles and captained her JESS Primary school team. After going to study geophysics at university in the UK, she scored a sensational try in a cup final at Twickenham. She has played for England sevens, and is now contracted to top Premiership club Saracens.
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Seren Gough-Walters (Sharjah Wanderers mini, Wales rugby league international)
Few players anywhere will have taken a more circuitous route to playing rugby on Sky Sports. Gough-Walters was born in Al Wasl Hospital in Dubai, raised in Sharjah, did not take up rugby seriously till she was 15, has a master’s in global governance and ethics, and once worked as an immigration officer at the British Embassy in Abu Dhabi. In the summer of 2021 she played for Wales against England in rugby league, in a match that was broadcast live on TV.
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Erin King (Dubai Hurricanes mini, Ireland sevens international)
Aged five, Australia-born King went to Dubai Hurricanes training at The Sevens with her brothers. She immediately struck up a deep affection for rugby. She returned to the city at the end of last year to play at the Dubai Rugby Sevens in the colours of Ireland in the Women’s World Series tournament on Pitch 1.
COMPANY PROFILE
Name: Qyubic
Started: October 2023
Founder: Namrata Raina
Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed
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The biog
First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
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Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
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COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
Kanguva
Director: Siva
Stars: Suriya, Bobby Deol, Disha Patani, Yogi Babu, Redin Kingsley
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
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