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Have you ever stopped to think about how a lack of immigration and demographic crises are shaping China's economic future in unexpected ways?
According to Ruy Alves, manager at Kinea, these are central challenges that this country currently faces. During his participation in the Os Economistas Podcast, Alves detailed how these problems are impacting the global economy and what this could mean for the future of the economic powerhouse.
The demographic problem in China
According to Ruy Alves, China is in the midst of a serious demographic crisis. “The situation reached a point where many people were buying their third or fourth home, often closing on the property without even renting it,” explained the manager.
He detailed that culturally, in China, properties were not rented because the system penalized the financial returns obtained from rentals. People bought apartments just to increase their value, which resulted in many properties remaining unoccupied.
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According to Ruy Alves, this system proved to be unsustainable. “Now China will have to spend a few years adjusting its housing market and dealing with the internal costs of the economy,” he said. The manager notes that this crisis is not just a real estate market issue, but reflects a broader problem related to the country's economic and social structure.
Cost and education challenges
According to the manager, the education in China has become extremely expensive. “The healthcare system is also becoming increasingly expensive. With expensive healthcare, expensive education and expensive housing, who is going to get married to have children?” asked Ruy Alves.
He highlighted that these high costs are discouraging the formation of new families, which only worsens the demographic problem. Furthermore, Alves mentioned that China faces a deficit of women, with around 50 million fewer women compared to men.
“This deficit was created in a harmful way, as we can imagine,” he explained. The combination of these factors is creating a worrying scenario for the future of the Chinese population, making demographic recovery an even greater challenge.
China's economic rebalancing
For the manager, the Chinese economy needs urgent rebalancing. “We’ve tried enough to encourage the Chinese economy, but it doesn’t seem to be working,” said Ruy Alves.
China is trying to stand out in the production of electric vehicles and the chip production chain, but, according to the manager, “the avenues for growth seem limited at the moment”.
In this sense, he reports that the overload of electric cars on the global market and technology restrictions imposed by the US are further complicating China's economic recovery.
China's economic future
According to Ruy Alves, the Chinese economy faces significant challenges not only in its domestic market, but also in its international trade relations.
“The United States has already restricted the sale of certain products, such as semiconductors, to China, trying to limit its access to advanced technologies,” explained the manager.
This technological blockade is an attempt to control China's advance in strategic sectors and has profound impacts on the country's economy.
Furthermore, according to Ruy Alves, China is facing difficulties in its real estate market and in the stock market. “Even the Chinese people themselves don’t seem to trust the local market,” he said. This feeling of distrust is worsening the domestic economic crisis and making it more difficult for China to find effective solutions.
Similarities with the Brazilian market
For the manager, the Chinese market shares similarities with the Brazilian market. “Both have not shown significant growth in terms of value since 2006”, observed Ruy Alves.
He highlighted that the situation is so critical that even copper, one of the valuable natural resources, has been sold again due to oversupply from China.
“China started to export copper in excess,” explained the manager, reflecting on how policies and economic conditions can have global repercussions.
The situation in Europe
Ruy Alves also addressed the economic situation in Europe, which is at a critical inflection point. “Europe is literally between two giants: the United States, which dominates the technology sector, and China, which is growing more and more,” said the manager.
In this sense, he noted that, despite its reputation for quality and innovation, Europe has few technology companies and faces significant challenges in its economy.
Furthermore, Ruy Alves highlighted that the Europe is facing intense competition in the automotive sector.
“Asians are producing better and more competitive electric cars”, highlighted the manager. This growing competition has generated debates about possible sanctions on electric cars in Europe, showing the impact of Asian pressure on the European automobile industry.
Reflections on the global economy
Finally, according to Ruy Alves, the global economy is constantly changing. “The geopolitical and economic decisions taken today will shape the future of countries like China and Europe”, concluded the manager, warning that what is certain is that China faces complex challenges that require rapid and effective adaptation to ensure long-term economic stability. term.
Watch the video in full:
