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National security restrictions likely to harm Chinese econom...
02-06-2023 15:23
National security restrictions likely to harm Chinese economy
National security restrictions likely to harm Chinese economy

The Chinese economy is likely to lag behind the US due to Beijing’s focus on national security, Minxin Pei, professor at Claremont McKenna College noted.
Pei stated that while both the US and China regard national security as important and are ready to make economic sacrifices to uphold it, the United States is expected to come out on top in the competition with its rival. China, on the other hand, is likely to bear higher costs in the game of economic attrition and fall behind the US.
Among the problems faced by the Chinese economy, the analyst noted the loss of access to US technology and IT solutions. These measures were previously imposed by the US authorities in the name of national security. In response, China banned the products of US semiconductor manufacturer Micron. The professor thinks it will be costly for China, even though Chinese authorities are taking solace in the fact that the American economy will also suffer due to this confrontation.
Currently, foreign companies that plan to do business in China are facing a number of restrictions. China's regulators are checking them for potential security violations, which has scared off a number of foreign investors.
The Chinese government is currently spending vast amounts of money on maintaining national security policies. At the same time, Chinese manufacturing output is declining along with demand for various products. However, experts assume that in the long term, the Chinese economy will outperform the US economy, and that the world’s second-largest economy will eventually catch up.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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