Prof Zhang Jun

China’s decade of extraordinary growth from 2008 is lost on its critics. Why?

Serious challenges on several fronts in that year did not deter the authorities from pressing on with a commitment to change the Chinese growth model

The story of how these efforts contributed to the rise of the middle class and the emergence of a world-leading digital economy demands a fuller understanding

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A reporter uses mobile phones for a live broadcast of the National People’s Congress meeting at the Great Hall of the People in Beijing, on March 8. The consumption-focused innovative industries that barely existed in 2008 are increasingly propelling the Chinese economy today. Photo: EPA-EFE

Prof Zhang Jun

Published: 1:00pm, 3 Apr 2019Updated: 10:22pm, 3 Apr 2019

For the West, the year 2008 marked the beginning of a difficult period of crisis, recession and uneven recovery. For China, 2008 was also an important turning point, but one followed by a decade of rapid progress that few could have foreseen.

Of course, when the US investment bank Lehman Brothers collapsed, triggering a global financial crisis, China’s leaders were deeply worried. Their concerns were compounded by natural disasters – including severe freezing rain and snowstorms in the south in January 2008 and the devastating Sichuan earthquake four months later, which killed 70,000 Chinese, as well as unrest in Tibet.

At first, China’s fears seemed to be coming true. Despite hosting an impressive Olympics in Beijing that August, its stock market plunged from its 2007 high of 6,124 to 1,664 in October 2008, in what amounted to a record-breaking crash.

But the Chinese authorities remained dedicated to their long-term plan to revise the country’s growth model, by shifting away from exports and towards domestic consumption. In fact, the global economic crisis served to strengthen that commitment, as it underscored the risks of China’s dependence on foreign demand.

Chinese mark the 10th anniversary of the massive earthquake that hit Sichuan in 2008, on May 12 last year at an event in Beichuan county, one of the worst-hit areas. Photo: EPA-EFE

This commitment has paid off. Over the past decade, many millions of Chinese have joined the middle class, which is now 200-300 million strong. With an average net worth of US$139,000 per person, this group’s total spending power could amount to over US$28 trillion, compared to US$16.8 trillion in the United States and US$9.7 trillion in Japan.