theoretically, the thing that should happen as europe imports more from china than it exports to china, is that there’s a net flux of currency into china, which would devalue the euro and inflate the yuan. this should increase price levels in china while also lowering them in europe, until production capabilities can shift back to europe.
China manipulates its currency and underpays its workers specifically to avoid that. Their strateigic plan is to keep their currency weak until all western industrial competition is dead, and only then do they jack up prices.
The real (inflation-adjusted) incomes of the poorest half of the Chinese population increased by more than four hundred percent from 1978 to 2015, while real incomes of the poorest half of the US population actually declined during the same time period. https://www.nber.org/system/files/working_papers/w23119/w23119.pdf
theoretically, the thing that should happen as europe imports more from china than it exports to china, is that there’s a net flux of currency into china, which would devalue the euro and inflate the yuan. this should increase price levels in china while also lowering them in europe, until production capabilities can shift back to europe.
China manipulates its currency and underpays its workers specifically to avoid that. Their strateigic plan is to keep their currency weak until all western industrial competition is dead, and only then do they jack up prices.
meanwhile in the real world
The typical Chinese adult is now richer than the typical European adult https://www.businessinsider.com/typical-chinese-adult-now-richer-than-europeans-wealth-report-finds-2022-9
The real (inflation-adjusted) incomes of the poorest half of the Chinese population increased by more than four hundred percent from 1978 to 2015, while real incomes of the poorest half of the US population actually declined during the same time period. https://www.nber.org/system/files/working_papers/w23119/w23119.pdf
From 1978 to 2000, the number of people in China living on under $1/day fell by 300 million, reversing a global trend of rising poverty that had lasted half a century (i.e. if China were excluded, the world’s total poverty population would have risen) https://www.semanticscholar.org/paper/China’s-Economic-Growth-and-Poverty-Reduction-Angang-Linlin/c883fc7496aa1b920b05dc2546b880f54b9c77a4
From 2010 to 2019 (the most recent period for which uninterrupted data is available), the income of the poorest 20% in China increased even as a share of total income. https://data.worldbank.org/indicator/SI.DST.FRST.20?end=2019&%3Blocations=CN&%3Bstart=2008
Chinese household savings hit another record high in 2024 https://www.wsj.com/livecoverage/stock-market-today-dow-jones-bank-earnings-01-12-2024/card/chinese-household-savings-hit-another-record-high-xqyky00IsIe357rtJb4j