China's Expanding Industrial Policy Carries Risks as Beijing Does Not Back Down, US Commerce Group's Report Says
China's industrial policy may bring risks to the global economy as Beijing doubles down on expanding the industrial sector, according to a report published by the U.S. Chamber of Commerce on Monday.Some of the risks involve potentially reducing the effectiveness of resource allocation, pressure on corporate profitability, weakening private investment and slowing research and development growth in some key sectors.The report, which was prepared by research firm Rhodium Group, said around $650 billion worth of global exports, which represents 12% of G7 countries' exports, "could be directly exposed to Chinese market share gains by 2030 if they continue at the current pace."The report said the impact of China's industrial and economic policies is expected to continue expanding globally as the government keeps on providing support and encouraging firms to upgrade production technologies, instead of cutting capacity, neglecting to address weakness in demand."While authorities have acknowledged the need to address imbalances, policy responses have so far fallen short of the structural reforms required to shift China's growth model," the report said.