[sdm]

> I thought the primary cause was the demographics changes which is creating knock on effects

Not really. Yes, China is starting to experience demographic decline but it will be a long long time before it affects them economically. They could still absorb every North American job and still have people left over. That's just how big China's population is. Demographic decline will eventually bite them but they have a very long runway. China is very different from Japan's case.

As for policies, again, not really. It's more that about 10 years ago most low cost manufacturing shifted out of China because cheaper regions caught up and were able to provide better value. China has been been talking about this trend since before Xi and a big focus has be shifting to a service economy built on internal demand. This is the part where policies come into play. The shift has not gone as well as they hoped. And again, it's not really about Xi messing up Deng's work. The world, and China, is different from Deng's world. Deng's approach would not work in a world where low cost manufacturing has moved overseas. If anything, it's more of an issue that Xi has stuck to closely to Deng's approach and not adapted to the changing world.

[chii]

> Deng's approach would not work in a world where low cost manufacturing has moved overseas.

no, but the next step, which is to mimick what japan did post lost-decade, is to move into higher value manufacturing, increase automation and increase domestic service industry.

However, the required tech, research cooperation and transfers that would've been needed is going to need deep trust and cooperation between the west and china - that entails giving up the full authoritarian control of the economy. This isn't something the CCP can entertain, unlike japan.

China still has ambitions of becoming a superpower that can dictate terms on the world stage. I think this is the difference between Xi and Deng. Xi cannot move past being second fiddle. And i think this is the real cause for china's downfall (if it were to happen).

[hakfoo]

I was under the impression that manufacturing moved to China for the bottom price first, but higher value manufacturing remained there because there's infrastructure symbiosis now.

If you're a absolute lowest-value-add manufacturer (think cereal box toys), yeah, you could put that anywhere plastic stock could be delivered. But as you start to make more sophisticated products, supply chains get way more relevant. If your cereal box toy acquires a blinking LED, a coin cell battery, and a screw to hold the battery box closed, it becomes compelling to manufacture the main casting in China because all the other parts are already made there and the logistics will be cheaper and more responsive.

This seems like the same play as early Silicon Valley, and Taiwan in the era of early PC clones.