It appears that China is strongly confident that its economic power is unshakable. However, the economic breakthrough that China made in a fairly short period was entirely due to Western countries. While China was in an economic depression, many foreign companies opened their shop chains and factories in the country. It literally breathed life in China's economy. Therefore, the decision of Western firms to leave China may cripple China's economy in the near future.
Remarkably, 20 years ago, China, the world’s second-largest economy, lagged behind even Russia, which is not even in the top ten. However, with the appearance of western companies in the local market, there has been large foreign capital inflow, new jobs, and a good example for the country how to do business. No wonder, China was able to revive its economy in a short period and with its rich resources, it became one of the leading countries. After such a dazzling economic success, China starts forgetting to whom it owed its economic recovery. In fact, it turned its back on its foreign partners. This is why many Western companies have already started searching for new countries where they can move their factories. Now Japan’s largest corporations have also decided to lessen its reliance on China. The Japanese government has launched a program aimed at reducing economic dependence on China. About 60 companies will receive a total of 57.4 billion yen ($536 million) in subsidies from the government to relocate their production, while another 30 will get money for investments in Vietnam, Myanmar, Thailand, and other Southeast Asian countries.
If foreign firms relocate their factories, millions of people in China will lose their jobs. So, China's economic power will burst like a soap bubble.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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