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● China’s Abandoned Billion

China’s Domestic Demand Priority Policy and a New Phase in the US-China Hegemony War

1. Restructuring of China’s Domestic Demand Policy – Fostering Centered on First-Tier Cities

The Chinese government is adopting a strategy to expand domestic demand centered on first-tier cities rather than trying to revive all provinces.
This structure forces considerable sacrifice and concessions on residents of second- and third-tier cities.
In other words, there is a widespread perception that the old plan to develop all of China evenly is impossible to realize.
This domestic demand priority policy is being implemented focusing on first-tier cities that will upgrade investment, entrepreneurship, and consumption.

2. The Flow of the US-China Hegemony War – Trade Imbalance Between the US and China

The deviation in trade volume between the US and China has continued to widen, but the increase has recently slowed.
Both the Trump and Biden administrations have attempted trade pressure according to China’s strategy.
The US is still maintaining its advantage in the US-China hegemony war, which is also related to China’s bleeding management.
From an economic outlook and investment perspective, US-China relations face uncertainty.

3. China’s Bleeding Management and the Rare Earth Problem

China has tried to secure industrial competitiveness for its companies through massive subsidies and R&D support.
However, as the national budget has reached its limit, it has become negligent in revitalizing domestic demand.
In particular, securing rare earths, which are essential for advanced semiconductors and ultra-precision processes, has emerged as a key issue.
Rare earths are essential resources for global industries, including the US, and China has seized control of the supply.
The US is pursuing exploration of rare earth deposits within its own country and securing alternative supply lines.

4. US Response and Regulations – Rediscovering Domestic Deposits Instead

The US is embarking on rediscovering rare earths within its own country to reduce its dependence on China.
However, there are limitations in that the cost burden is large due to labor standards and environmental regulations, and it is difficult to expand production in the short term.
The US government and companies are cooperating to diversify supply chains, which is becoming an important axis of the US-China hegemony competition.
From an economic outlook and investment perspective, these efforts to secure energy and resources are attracting attention.

5. The Two Sessions and Stock Market Changes – Domestic Demand Policy Drive and Stock Market Reaction

At the Chinese Two Sessions, the tone of fostering domestic demand centered on first-tier cities is emphasized, deviating from the traditional ideal of common development.
As a result, second- and third-tier cities are relatively marginalized, and public dissatisfaction and demands for sacrifice are increasing.
In line with the Two Sessions schedule, pressure and cautionary remarks against China are emerging from Trump and the media,
The Chinese stock market is showing an unstable situation amid these internal contradictions and external pressures.
Investors should pay close attention to key economic keywords such as US-China hegemony, rare earth acquisition, and domestic demand policies.

China is trying to revitalize domestic demand by focusing on first-tier cities instead of trying to revive all regions.
In this process, second- and third-tier cities are becoming victims, and trade imbalances with the US and the US-China hegemony war are intensifying.
China’s bleeding management and rare earth acquisition strategy are emerging as key issues in global industrial competition.
The US is seeking an alternative rare earth supply chain within its own country and responding,
At the Two Sessions, changes in the stock market are appearing as the focus is placed on strengthening domestic demand policies and promoting investment.
Major SEO keywords: Economic outlook, US-China hegemony, rare earths, domestic demand, investment.

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