Author: Daniel H. Rosen
Affiliation: Rhodium Group, Council on Foreign Relations (member), board member of the National Committee on US-China Relations, and former Senior Adviser for International Economic Policy at the White House National Economic Council and National Security Council (2000-2001).
Organization/Publisher: Foreign Affairs
Date/Place: April 15, 2022/ New York, USA
Type of Literature: Analysis
Word Count: 3000
Link: https://reader.foreignaffairs.com/2022/04/15/the-age-of-slow-growth-in-china/content.html
Keywords: China, Economy, Growth, GDP, National Security Strategy, Russia-Ukraine War, Communist Party of China
Brief:
The author claims that after having attained the status of economic-growth bellwether among developing nations, that the coming days must worry China, a one-party ruled world’s largest populated country. China is grappling with an outflow of capital, energy prices are up, imports surging, and a worsening ratio of export prices to import prices despite record high exports. Outside the country, inflation is eating peoples savings in many countries — mostly dependent nations on Chinese manufacturers, thus receding their capacity of spending. After declaring success in suppressing COVID-19, the virus is back and hitting hard at Shanghai, China’s economic power house. Although China registered positive growth amid the pandemic, it ate China’s spending at record highs and this analysis insists that China will not be able to maintain its positive growth, thus hitting hard the credibility of the Chinese Communist Party. Drawing a pessimistic picture of China’s growth this fiscal year, the author refuses to accept that Beijing may see a return of Japan’s era of the 1990s, because the country’s per capita income is far lower while it is witnessing a “demographic challenge as its population has been declining for years” with more than 130 men for 100 women. “Fewer workers, fewer future buyers for unbuilt apartments, fewer consumers: these demographic fundamentals are impossible to hide or change in just a few years,” the author notes. Amid a boom in Artificial Intelligence, the author says that China has mostly been dependent on borrowed technology and the country’s “innovation funding is underperforming.” On the so-called concerns raised by Western nations regarding transparency in the Chinese system, the author says: “Western authorities don’t need to command firms to curtail their China ambitions: transparency about the extent of China’s macroeconomic stress will do that job naturally. An elective decoupling is taking place, even without maximum arm-twisting.”
By: Riyaz ul Khaliq, CIGA Non-resident Research Associate
