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● Peak China, Economic Divide

Inherent Risks and the Light of the New Economy in the Chinese Economy: Key Summary of the Global Economic Outlook

[1] Post-Pandemic Contraction of the Private Sector and Real Estate Market Slump

China's private consumption and investment sentiment significantly contracted due to lockdowns in Wuhan and Shanghai during the pandemic.
Strong regulations on large corporations like Alibaba in 2021 also worsened private sentiment.
The real estate market has been declining for three consecutive years, and despite policy easing, prices are not easily recovering.
This situation is a result of the focus on the traditional industry (old economy) sector.

[2] Old Economy vs. New Economy: Differences in GDP Composition and Growth Engines

China's GDP can be divided into the old economy and the new economy.
The old economy, centered on real estate and domestic demand, is experiencing negative growth, while the new economy, centered on high-tech industries such as AI, robots, electric vehicles, and semiconductors, is growing at about 10% annually.
As a result, the overall growth rate has decreased to about 5%, but the investment multiplier effect in the new economy sector is very high, making the economic increase comparable to that of the United States.

[3] US-China Trade War and the Exodus from China Phenomenon, and the Competitiveness of Industrial Clusters

While some companies have begun an "exodus from China" due to US tariffs and the trade war,
many companies are unable to leave easily due to China's efficient parts industry clusters and huge domestic market.
In particular, in the global economy and high-tech industries, cost-effectiveness and quality competitiveness based on manufacturing are still strengths.
Therefore, the expansion of investment outside of China is a short-term phenomenon, and gambling-style investment strategies based on tariff uncertainty are risky.

[4] ROK-China Relations Amid US-China Conflict and the Outlook for the Cosmetics Industry

As the United States strengthens its containment of China, China is expanding its external diplomacy.
In particular, relatively friendly policies toward South Korea (visa exemptions, invitation of experts, etc.) are noticeable in ROK-China-Japan relations.
Meanwhile, the cosmetics industry shows a mixed picture of influence within China due to raw material imports and reorganization of manufacturing processes.
China still maintains an advantage in high-tech fields such as semiconductors, which can give hope to the Korean industry as well.

[5] Conclusion – Complex Risks and Opportunities in the Chinese Economy, Importance of Long-Term Strategy

While the Chinese economy is contracting in the traditional industrial sector, it still plays a large role in the global economy through investment in the new economy's high-tech industries.
The economic size is already enormous, and although the growth rate is lower than in the past, the GDP increase is similar to that of the United States.
Therefore, rather than being elated or discouraged by short-term tariff wars or pressure to leave the industry, it is necessary to focus on the opportunities of strengthening China's domestic market and expanding investment in high-tech industries.
It is very important to establish a long-term strategy that flexibly responds to the US-China conflict and changes in government policy.
It is always necessary to closely observe the situation with a focus on major SEO keywords such as Chinese economic outlook, global economy, high-tech industry, trade war, and domestic market.

< Summary >

China's old economy has contracted due to the pandemic and regulations, leading to a slump in real estate and private consumption.
However, the new economy sectors such as AI, robots, electric vehicles, and semiconductors are growing at 10% annually, playing a large role in terms of GDP increase.
The phenomenon of leaving China has been partially progressing amidst the trade war with the United States, but companies are not leaving easily due to efficient industrial clusters and the power of the domestic market.
In ROK-China relations, positive signals are appearing in some industries such as cosmetics due to friendly policies.
Therefore, it is necessary to accurately recognize the risks and opportunities of the Chinese economy and establish a long-term, flexible strategy.

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