China certainly matters to our economy, but much less so to our markets. We have basically outsourced cheap labor and mindless drone manufacturing to China. IMO, that is a very wise thing to do, since any world leader doesn't get there or maintain that position using brute force manual labor. Instead, great powers must innovate, and that is something we have excelled at. In stark contrast, the Chinese really have relatively little innovative capacity, but instead excel at copying, piracy, and stealing. That is not the pathway to a truly great economy or nation, since it is inherently parasitic and opportunistic.
Re cycles, yes I agree with you. There are many who study such cycles, and many of the algorithms that now drive market trends worldwide are based on periodicity phenomena. These are very well-studied though highly secretive.
Re Chinese GDP, 4.5% may be a recipe for disaster in China. Many economists estimate that merely just to stave off massive civil unrest, China must maintain GDP growth of 6% to 7% at a minimum. One reason for this is that unemployment is horrendous in China, and there are literally millions of new college graduates who get dumped on the job markets every year, with little hope of getting a decent job. I have known university graduates in China who are salespeople at the equivalent of department stores, and damn glad to have that job. I think a major factor that prevents civil unrest in China is the widespread belief that through hard, relentless work and saving every possible penny, it is possible to start a business in China and get wealthy. If you ask me, that belief makes people accept the extreme polarization of wealth in China. Once that belief begins to disintegrate, then all you need is a charismatic leader, and the pathway to civil war or even outright revolution is clear from there.
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