China has a won clear victory in the first battle of the US “trade war”. But the U.S. will not abandon its economic struggle against China. This article analyses the forces that will determine the outcome of this “protracted” economic war.
If the U.S. cannot succeed in slowing China’s economy, then it can only decrease China’s lead in growth rate by increasing the percentage of net fixed capital formation in the U.S. economy.
China’s GDP growth rate in 2024 of 5.0% compares to the U.S.’s of 2.8%. China’s was therefore 80% higher than the U.S.
Instead of the chimera of general “de-dollarisation”, the correct Marxist strategy of development pursued by countries such as China should be taken as the model to be studied.
China’s economy, as it heads into 2024, has far outgrown all other major comparable economies. This reality is in total contradiction to claims in the U.S. media.
The U.S. knows from its experience in defeating Germany, Japan, and the Asian Tigers that a decisive way to slow a competitors growth rate is to get it to reduce its level of investment. The problem for the U.S. is that it has no means to force China to reduce its level of investment.
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