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Opinion | Doomsayers should think twice before writing off China’s economy
- China’s economy faces serious short-run challenges but is still in a better position than many to weather global economic headwinds
- Strong exports, consistent leadership, pro-growth policies, a focus on innovation and continued foreign investment bode well for long-term prospects
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Over the past three decades, there has been no shortage of doomsayers on China. I met one at a seminar on China’s 18th party congress at Oxford University in 2013, who maintained that the congress was a “desperate” effort by the Communist Party to save itself from demise.
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Looking at Western mainstream media over the past week, I have been struck by the same pessimistic tone – though the focus has shifted to the Chinese economy. Such is its “fragile” state, analysts assert, that China has few options to revitalise growth and no hope of catching up with the US in our lifetime.
True, China’s economic growth slowed to 3 per cent in the first nine months this year, well below its 5.5 per cent target, and its lowest over four decades. But it would be rash to predicate China’s long-term economic outlook on the performance of just a few quarters, or even a few years. That China’s economy expanded as it did reflects its dynamism in view of the Covid-19 lockdowns and other restrictions.
When these measures end, suppressed demand – and supply – will surge, giving the economy a strong boost. China would then return to normal growth.
Already, the economy is gaining momentum as restrictions ease. International flights in and out of China are set to double. Entry rules have been relaxed for foreigners such as businessmen and students.
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With a refined precision targeting strategy, fewer people are likely to be affected by control measures. Locking down an entire city, as happened with Shanghai, is a thing of the past.
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