Much is being made of the China-driven price war upending the electric vehicle universe. Sticker shocks emanating from electric-vehicle giant BYD alone have Elon Musk practically begging for fresh tariffs, lest China “demolish” Tesla and its ilk.
Yet this upheaval in the EV space is a microcosm of corporate America’s 2024 as Chinese deflation intensifies. A harbinger, in other words, of how China aims to get as close to this year’s “around 5%” growth target as possible without exacerbating internal imbalances.
The National People’s Congress that began on March 5 hints at two China-themed threats to the global financial system.
One, the annual gathering of China’s parliament failed to unveil any big stimulus moves to revive consumer price inflation. Two, Xi pledged to unleash “new productive forces” by championing higher-value-added sectors from EV supply chains to cutting-edge semiconductors and renewable energies to advanced infrastructure.