Welcome to the Nèijuǎn 内卷 World Economy ...

Welcome to the Nèijuǎn 内卷 World Economy ... "An economy twisting inward without real progress ...

Neijuan has featured in analyses of life in China in the recent years, due to the uneven distribution of social, economic, and educational resources and ongoing economic malaise in terms of higher education, labor markets and youth unemployment.

Neijuan reflects a life of being overworked, stressed, anxious and feeling trapped. A lifestyle where many face the negative effects of living a very competitive life for for apparently little gain. “A prevalent sense of being stuck in an ever so draining rat race where everyone loses.”

Nèijuǎn  内卷 is made of two characters which mean “inside” and “rolling”. Ian Johnson, senior fellow at the council on foreign relations translates this as "life twisting inward without real progress".

A world economy, twisting inward without real progress ....
At the moment, it feels like the world economy is moving toward "Nèijuǎn 内卷  ...  a world economy, twisting inward without real progress.

World trade growth is slowing. World growth is stagnating. A world which includes the UK post Brexit,  European stagnation in the face of energy cost acceleration, China and the U.S. decoupling and a setback for globalization as a cold war mentality returns with an East West axis.

"Guns or Butter" takes in a new meaning as Moscow barters maize for munitions with Pyongyang. China develops BRICS Plus, a new trading block no longer to be Dollar dependent.

This week news of the China ban on iPhone use for government workers in a Tik for Tok reaction to U.S. and European restrictions on Huawei, sent tech stocks tumbling.

Huawei launched a new smartphone which appears to have bypassed or surpassed chip restrictions by the Biden administration. CNN reports, the United States government is seeking more information about the Huawei Mate 60 Pro, a Chinese smartphone powered by an advanced chip which China cannot have produced!

The new flagship phone, includes a 5G Kirin 9000s processor developed specifically for Chinese manufacturer Huawei. Industry experts could not understand how the company would have the technology to make such a chip following sweeping efforts by the United States to restrict China’s access to foreign chip technology.

SMIC makes waves of progress and Huawei demonstrates the futility of sanctions. Lessons to be learned from the 12th century when Canute demonstrated his inability to control the progress of tides.

The futility of Sanctions ...
The futility of trade sanctions is adequately demonstrated by the experience of the Trump administration. Trump’s tariffs have cost Americans tens of billions of dollars. Despite claims that China will pay, border taxes were passed on to consumers by import agents.

Following the imposition of tariffs on Chinese imports. The goods trade deficit with China did dip when Trump launched his tariff campaign in 2018. At the same time, however, the deficits with Mexico and the rest of the world went up.

Since 2017, when Mr. Trump entered the Oval Office, goods imports to the U.S. in nominal dollars have increased 174% from Vietnam, 116% from Taiwan, 96% from Bangladesh, 89% from Thailand, 76% from India, and 62% from South Korea.

China Exports are falling this year ...
There are some suspicions China product is being redirected from Vietnam and Mexico to bypass restrictions.

China’s exports fell by 8.8 per cent in August compared with a year earlier, while imports fell by 7.3 per cent last month. Exports to most of China’s major trading partners continued to shrink in August, though the declines narrowed from July.

Export values continued to contract but export volumes continued to hold up well and are still above their pre pandemic trend.

Trade Surplus Remains ...
China’s total trade surplus in August stood at US$68.4 billion, down from US$80.6 billion in July. The surplus narrowed as imports accelerated more than exports.

China’s customs authorities highlighted an expanding trade surplus with the Asean bloc, while China’s trade surplus with the US and European Union declined.

Analysts expect China’s exports to decline over the coming months before bottoming out toward the end of the year. Expect further consolidation with the ASEAN bloc and BRICS+.

In Europe ...
In the Euro area growth in the second quarter was up buy just 0.1%. There was zero growth in Germany and a 0.5% drop in Italy. France appeared to be the bright spot with 0.5% growth.

In the UK, the latest signals from the PMI Markit surveys suggest a slowdown into the third quarter from growth of around 0.4% in the first half.

We eagerly await the Chancellor's Autumn statement on the 22nd November. By then there should be good news on inflation and the direction of monetary policy.

We don't expect much from the November statement. Little suggestion of growth plans for the UK economy to indicate we can escape from Nèijuǎn, an economy twisting inward without real progress ...

References ...
"China’s “Involuted” Generation" A new word has entered the popular lexicon to describe feelings of burnout, ennui, and despair. By Yi-Ling Liu The New Yorker May 14, 2021.

'Involution': The anxieties of our time summed up in one word Zhou Minxi CGTN December 4th 2020.

The US government is investigating China’s breakthrough smartphone  Samanthan Murphy CNN Business September 6th 2023.

According to What's On Weibo, The popular use of the Chinese translation of ‘involution’, nèijuǎn 内卷, started to receive attention in Chinese media in 2020. It is  meant to explain the social dynamics of China’s growing middle class. References include "Involution": The Anxieties of Our Time Summed Up in One Word” by Zhou Minxi (CGTN) and "China’s “Involuted” Generation" a new word to describe feelings of burnout, ennui, and despair and by Yi-Ling Liu*.