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Titel

Who Killed the Chinese Economy? The Contested Causes of Stagnation

Ist Teil von

• Foreign affairs (New York, N.Y.), 2023-11, Vol.102 (6), p.176-183

Ort / Verlag

New York: Council on Foreign Relations, Inc

Erscheinungsjahr

2023

Link zum Volltext

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PAIS Index

Beschreibungen/Notizen

• In The End of Chinas Economic Miracle (September/October 2023), Adam Posen describes Chinas recent economic challenges as a case of economic long covid. Chinese President Xi Jinpings extreme response to the pandemic, he posits, triggered the general publics immune response and produced a less dynamic economy Posens analogy is creative and insightful. But his diagnosis misses the chronic diseases that afflicted Chinas economy well before the covid-19 pandemic: an exhausted growth model, stunted population growth thanks to the one-child policy, and, most notably, Xis failures of leadership.Xi is not to blame for the Chinese economys deepest structural problems. He is, however, responsible for the governments failure to deal with them. In 1978, Deng Xiaoping initiated sweeping economic reforms after the end of the Cultural Revolution. Standing apart from previous Chinese Communist Party (ccp) leaders, particularly Mao Zedong, Deng took an open and pragmatic approach toward economic development. He rebooted Chinas relationship with the United States, observing in 1979 that all countries that fostered good relations with the United States have become rich. When Chinas economy faltered after the governments crackdown on the 1989 Tiananmen Square protests, he headed off a downward spiral by clearly reiterating the partys commitment to economic reforms, especially during an influential 1992 tour of southern China.Over the last 45 years, China has transformed from one of the worlds poorest and most isolated countries into the heart of the global supply chain. That economic rise, however, was built on a system of financial repression that prioritized investment and exports over domestic household consumption, leading to harmful stagnation on the demand side of the economy. Posen identifies the first quarter of 2020 as the "point of no return" for the Chinese economy, but it has faced looming problems for at least a decade. The workhorses of its growth model were already tiring years ago.When Xi became president, in 2013, he had an opportunity to focus on domestic demand-side economic reform by shifting government policy to promote consumption over investment and by developing a more robust social welfare system. Instead, the cumulative policy shocks of Xi's first two terms worsened the structural challenges that were dragging down- but not yet crashing-China's economy. They also badly weakened the confidence that undergirded Deng's opening-up era.