China's Growing Political Autocracy Limits Its Economic Prospects

Trade statistics from China's important trading partners also reveal the country's weakening economic conditions. Taiwan's official figures also show that orders for shipments from China and Hong Kong in September decreased significantly-by almost 30%. To some extent, slowing economic growth is expected as China transforms from a labor-intensive manufacturing economy to a higher value-added manufacturing- and service-oriented economy. What makes China's case unique is that its economic transformation is being driven by government initiatives instead of by market forces. China only has been able to achieve the manufacturing of "High technology" products through the importation and assembly of key components and equipment from abroad. China's heavy reliance on foreign technology has made it easier for the U.S. to choke off development of its high tech industry, notably its semiconductor chips and artificial intelligence components. New U.S. export restrictions on semiconductor chips and equipment to China may further slow its technological ambitions and economic growth. China's plunging stock market and weaker currency have further stoked investors' worries about the country's near-term economic future. In the long run, China's export prospects are likely to be squeezed between competition from developing countries' growing manufacturing strength and China's inability to climb the global supply chain network due to its technological limitations.