Tuesday, February 27, 2024

In fierce headwinds, China’s economy still grows, by Nathan Sperber (Le Monde diplomatique

JPEG - 409.9 kb

Holding together: a mother in Beijing hugs her child as the controversial one-child policy was phased out, 1 January 2016

Fred Dufour · AFP · Getty

Last year brought some pessimistic, even alarmist, analyses and commentaries on the state of China’s economy. Joe Biden called it a ‘ticking time bomb’. The Economist took a more sober approach with its cover story ‘Peak China?’ (13 May 2023). The same expression had been used – without a question mark – in a 2022 book by political scientists Hal Brands and Michael Beckley that was the talk of Washington. The authors held that China had become a ‘declining but defiant’ power whose unfulfilled dreams would encourage an aggressive stance in years to come.

These grim depictions are surprising, given the country’s 5.2% GDP growth in 2023. Yet gloomy predictions about China are nothing new. Its economy was said to be threatened by ‘overheating’ in the 2000s, by the financial crisis and downturn in international trade in 2009-10, and by capital flight and excessive debt in 2015-16. And Le Monde ran the headline ‘Cracks showing in China’s state capitalism’ in 2012.

Yet the public sector has never been wealthier, with 339.5trn yuan (around $49.0trn) of assets held by non-financial state enterprises at the close of 2022 – nearly three times the country’s GDP. The economy more than doubled between 2010 and 2022, according to the World Bank.

Though tales of crisis and stagnation aren’t always accurate, they no doubt comfort the Western elites who generate and heed them, perhaps dreaming that the People’s Republic of China (PRC) will relive Japan’s 1990s misadventures. Many in the 1980s thought that Japan’s industrial and financial heft would surpass that of the US; Ezra Vogel’s Japan as Number One: Lessons for America (Harvard University Press, 1979) was an American bestseller. Then the yen grew too strong (thanks to Washington), the real estate bubble burst and long years of deflation followed, putting an end to such predictions.

China is staunchly independent

This story has little likelihood of repeating itself. China has 11 (…)

Full article: 1 895 words.

This article can be read by subscribers

(2Hal Brands and Michael Beckley, Danger Zone: The Coming Conflict with China, WW Norton, New York, 2022.

(3‘Chine: le capitalisme d’État se fissure’ (Cracks showing in China’s state capitalism), Le Monde économie, 30 April 2012.

(4‘General report of the State Council on the management of public assets in 2021’ (in Chinese), website of the National People’s Congress, 16 November 2022.

(5World Bank Open Data, data.worldbank.org/.

(6Chinese National Bureau of Statistics, data.stats.gov.cn/.

(8Kenneth S Rogoff and Yuanchen Yang, ‘Peak China Housing’, working paper no 27697, National Bureau of Economic Research, Cambridge (Massachusetts), 2020.

(10Nathan Sperber, ‘Une finance aux ordres: Comment le pouvoir chinois met le secteur financier au service de ses ambitions’ (Obedient finance: How the Chinese government uses the financial sector for its own ends), Institut Rousseau, Paris, 5 December 2020/.

(11World Bank Open Data.

Related Articles


Please enter your comment!
Please enter your name here

Latest Articles