China cannot pivot to a consumption-based economy because its citizens' wealth is trapped in a collapsing property market. With 60% of household wealth in real estate and prices falling, families cannot borrow against their homes to spend. This structural problem locks China into an export-focused model until at least 2027.
China is emerging as a medical tourism hub by capitalizing on the systemic failures of Western healthcare, like the UK's NHS. Patients facing multi-year waitlists at home are now flying to China for faster, cheaper, and often immediate diagnosis and treatment, creating a new service-based export for Beijing.
China employs a dual strategy for AI. Domestically, its Cyberspace Administration rigorously penalizes unlabeled deepfakes to maintain social control. Abroad, its companies like ByteDance face no such constraints, allowing them to use foreign IP freely and creating a significant regulatory arbitrage advantage over Western competitors.
Beyond manufacturing, China is building a services economy by creating "Special Medical Zones" like Hainan Island. These zones are designed to attract foreign patients by offering easy access to cutting-edge, foreign-approved treatments and drugs in areas like stem cell research, signaling a deliberate push into high-value medical tourism.
A US Supreme Court decision striking down President Trump's emergency tariffs has unintentionally benefited China. By lowering the effective tariff rate by 7%, it reduces external pressure on Beijing to reform its export-driven economic model and weakens Trump's negotiating position ahead of a key summit with Xi Jinping.
China's relentless export growth, particularly in sectors like EVs, isn't just a top-down government strategy. It's fueled by private companies that must export to survive amidst a severe domestic slowdown. This bottom-up pressure makes any government-led pivot to domestic consumption practically impossible.
Hollywood studios like Disney have lost their leverage over China. With the Chinese box office now dominated by domestic films, cease-and-desist letters against AI tools like ByteDance's C-Dance 2.0 are largely symbolic. Without US government intervention, Chinese firms can effectively treat foreign IP as "free public domain clip art."