Editorial - August 2023


Temps de lecture : min

The Chinese mirage

At the beginning of every year, market strategists and commentators offer their most eloquent market predictions for the 12 months to come. Often, it is the overly strong consensus views that never come about.

And 2023, at least for the seven months of it that have already passed, is no exception to that “rule”.

According to the experts in question, this year was supposed to see the return of the Chinese phoenix, thanks to the lifting of the constraints imposed on the population for three years, the reopening of the country’s borders and possibly even an economic recovery programme aimed at revitalising production. The net effect of all this was supposed to be not a Chinese economy as global driver – this status having been lost for several years – but one that saw significant growth, with ricochet effects on the rest of the world and certain sectors of the financial markets.

But the reality clearly bears precious little resemblance to this picture: China’s growth is patchy and its inflation near zero, while its consumers are underspending and its exports thwarted by sluggish global growth.

« On top of these factors, China is having to deal with a rapidly changing world following two upheavals – one health, the other military – against a backdrop of climate change concerns. »


The Chinese model was based on globalisation and the fragmentation of production chains. The three abovementioned situations are driving Western countries to reshore as much of their production as possible, to regroup with friends and allies and to seek an autonomy that many of them had lost to China.

China’s advocates had predicted that its dependence on foreign trade would ultimately give way to a domestic refocusing based on a structural increase in domestic consumption and the country’s autonomy. Indeed, this was Xi Jinping’s plan. But the US policy of controlling or limiting trade with China, which began under Trump and is being actively pursued by Biden, is dealing a severe blow to that goal.

China has been a stock market mirage.

Will it also be an economic mirage?

Written by

Director of the International Actions division

August 16, 2023

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