{"id":77648,"date":"2023-01-30T06:00:40","date_gmt":"2023-01-29T19:00:40","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=77648"},"modified":"2023-01-27T15:18:22","modified_gmt":"2023-01-27T04:18:22","slug":"despite-the-rhetoric-chinas-economy-is-struggling","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/","title":{"rendered":"Despite the rhetoric, China\u2019s economy is struggling"},"content":{"rendered":"
<\/figure>\n

The Chinese government seems to have fallen back in love with economic growth. As the chaotic exit from its zero-Covid-19 policy has unfolded\u2014leading to tens of thousands<\/a> of deaths (at least<\/a>)\u2014the country\u2019s leaders have been eager to profess their undying devotion to robust economic recovery. But lip service alone will get China nowhere.<\/p>\n

Last month\u2019s central economic work conference\u2014the annual meeting where the top leadership of the Chinese Communist Party sets<\/a> the economic-policy agenda for the next year\u2014established growth as the government\u2019s top economic priority in 2023. In the weeks that followed, the public was treated to a spectacle not seen in years, as provincial governors fell over themselves to echo the CCP\u2019s commitment to growth and reassure jittery private investors and entrepreneurs.<\/p>\n

The political motivation for this shift is obvious: the CCP hopes to restore public support, after popular frustration with draconian zero-Covid restrictions gave way to dissatisfaction with the botched exit from the policy. But it will mean little unless the government translates its pro-growth rhetoric into action.<\/p>\n

To some extent, it already has. From easing borrowing restrictions<\/a> on \u2018high-quality\u2019 property developers to supporting demand<\/a> for housing, measures aimed at breathing new life into the beleaguered real-estate sector are high on the government\u2019s agenda.<\/p>\n

But such efforts are far from sufficient. As important as the property sector is to China\u2019s GDP, a (moderate) real-estate rebound alone cannot drive a comprehensive economic recovery, let alone a return to rapid growth. Likewise, the government\u2019s other short-term stimulus measures\u2014such as monetary and fiscal expansion, including infrastructure investment\u2014will likely provide only a temporary boost.<\/p>\n

Zero-Covid restrictions left deep scars on China\u2019s economy. Before the pandemic, the country boasted<\/a> 44 million micro and small enterprises, which accounted for about 98% of all registered businesses and some 80% of jobs outside the state sector. More than 90 million individuals were self-employed.<\/p>\n

But zero-Covid changed<\/a> all that. Because lockdowns were not accompanied by direct financial assistance for micro and small firms, many were driven out of business, placing a serious drag on growth.<\/p>\n

Geopolitical pressures\u2014not least the tech war<\/a> with the United States\u2014are compounding the impediments to Chinese growth. America is more committed than ever to restricting China\u2019s access to semiconductors and is applying diplomatic pressure<\/a> on the Netherlands to block the Dutch company ASML from selling a wider range of its chip-production machines to China. The possibility of new American sanctions on China cannot be ruled out, especially now that Republicans control the US House of Representatives.<\/p>\n

Meanwhile, China\u2019s implicit support for Russia\u2019s war against Ukraine has soured<\/a> its relations with its second-largest trading partner, the European Union. Some in Europe are now following the US example and calling<\/a> for an economic \u2018decoupling\u2019. Already, many European companies are seeking to diversify<\/a> their manufacturing supply chains\u2014including by sourcing alternative inputs and shifting some production\u2014in order to reduce their reliance on China.<\/p>\n

As long as geopolitical tensions persist, the business climate will remain uncertain, discouraging investment and reducing manufacturing employment as foreign companies exit the market. Finding ways to improve relations with the West is thus a prerequisite for economic recovery.<\/p>\n

To be sure, the Sino-American relationship is probably beyond repair at this point. Nonetheless, China could improve the diplomatic atmosphere by limiting its support for Russian President Vladimir Putin, as well as its sabre-rattling vis-\u00e0-vis Taiwan, thereby assuaging investors\u2019 fears of a Chinese invasion or naval blockade of the island.<\/p>\n

At the same time, China must launch a credible reform program. Under President Xi Jinping\u2019s leadership, China\u2019s government has embraced orthodox communist ideology and sought to increase the party\u2019s dominance over society and the economy. This approach\u2014exemplified by tighter social control<\/a>, the establishment of CCP cells<\/a> in private firms and provocations<\/a> against China\u2019s most important trading partners\u2014has severely damaged business confidence.<\/p>\n

If the CCP is serious about growth, it must recommit to former leader Deng Xiaoping\u2019s most important political reforms<\/a>, such as meritocracy, mandatory retirement and term limits. Increasing the legal system\u2019s independence is particularly urgent, in order to reassure private entrepreneurs that their personal safety and property will be protected.<\/p>\n

In terms of economic policy, China must privatise inefficient state-owned enterprises and create a more business-friendly regulatory environment. Measures aimed at supporting small businesses are also essential to a lasting economic recovery.<\/p>\n

Despite all the talk about growth, China\u2019s government has not unveiled any such plans. And nothing in official government rhetoric indicates that a fundamental change of direction\u2014like Deng\u2019s decisive break<\/a> with Maoist \u2018class struggle\u2019 in 1979\u2014is being considered. So, don\u2019t believe the hype: China\u2019s economy may be sputtering for a while yet.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Chinese government seems to have fallen back in love with economic growth. As the chaotic exit from its zero-Covid-19 policy has unfolded\u2014leading to tens of thousands of deaths (at least)\u2014the country\u2019s leaders have been …<\/p>\n","protected":false},"author":584,"featured_media":77651,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[1383,52,1193,365,204],"class_list":["post-77648","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-ccp","tag-china","tag-economy","tag-trade","tag-xi-jinping"],"acf":[],"yoast_head":"\nDespite the rhetoric, China\u2019s economy is struggling | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Despite the rhetoric, China\u2019s economy is struggling | The Strategist\" \/>\n<meta property=\"og:description\" content=\"The Chinese government seems to have fallen back in love with economic growth. As the chaotic exit from its zero-Covid-19 policy has unfolded\u2014leading to tens of thousands of deaths (at least)\u2014the country\u2019s leaders have been ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/\" \/>\n<meta property=\"og:site_name\" content=\"The Strategist\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ASPI.org\" \/>\n<meta property=\"article:published_time\" content=\"2023-01-29T19:00:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-01-27T04:18:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2023\/01\/GettyImages-1242428544.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Minxin Pei\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@ASPI_org\" \/>\n<meta name=\"twitter:site\" content=\"@ASPI_org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Minxin Pei\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.aspistrategist.ru\/#website\",\"url\":\"https:\/\/www.aspistrategist.ru\/\",\"name\":\"The Strategist\",\"description\":\"ASPI's analysis and commentary site\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.aspistrategist.ru\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-AU\"},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#primaryimage\",\"url\":\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2023\/01\/GettyImages-1242428544.jpg\",\"contentUrl\":\"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2023\/01\/GettyImages-1242428544.jpg\",\"width\":1024,\"height\":683,\"caption\":\"This photo taken on July 20, 2022, shows construction workers crossing a road in Shenzhen, in China's southern Guangdong province. (Photo by Jade GAO \/ AFP) (Photo by JADE GAO\/AFP via Getty Images)\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/\",\"url\":\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/\",\"name\":\"Despite the rhetoric, China\u2019s economy is struggling | The Strategist\",\"isPartOf\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#primaryimage\"},\"datePublished\":\"2023-01-29T19:00:40+00:00\",\"dateModified\":\"2023-01-27T04:18:22+00:00\",\"author\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/ed62d6c07f0016998ba37db162b7e9d1\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#breadcrumb\"},\"inLanguage\":\"en-AU\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.aspistrategist.ru\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Despite the rhetoric, China\u2019s economy is struggling\"}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/ed62d6c07f0016998ba37db162b7e9d1\",\"name\":\"Minxin Pei\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-AU\",\"@id\":\"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/ca20d7958a15eae38b3463a2213f7604?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/ca20d7958a15eae38b3463a2213f7604?s=96&d=mm&r=g\",\"caption\":\"Minxin Pei\"},\"url\":\"https:\/\/www.aspistrategist.ru\/author\/minxin-pei\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Despite the rhetoric, China\u2019s economy is struggling | The Strategist","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/","og_locale":"en_US","og_type":"article","og_title":"Despite the rhetoric, China\u2019s economy is struggling | The Strategist","og_description":"The Chinese government seems to have fallen back in love with economic growth. As the chaotic exit from its zero-Covid-19 policy has unfolded\u2014leading to tens of thousands of deaths (at least)\u2014the country\u2019s leaders have been ...","og_url":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/","og_site_name":"The Strategist","article_publisher":"https:\/\/www.facebook.com\/ASPI.org","article_published_time":"2023-01-29T19:00:40+00:00","article_modified_time":"2023-01-27T04:18:22+00:00","og_image":[{"width":1024,"height":683,"url":"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2023\/01\/GettyImages-1242428544.jpg","type":"image\/jpeg"}],"author":"Minxin Pei","twitter_card":"summary_large_image","twitter_creator":"@ASPI_org","twitter_site":"@ASPI_org","twitter_misc":{"Written by":"Minxin Pei","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebSite","@id":"https:\/\/www.aspistrategist.ru\/#website","url":"https:\/\/www.aspistrategist.ru\/","name":"The Strategist","description":"ASPI's analysis and commentary site","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.aspistrategist.ru\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-AU"},{"@type":"ImageObject","inLanguage":"en-AU","@id":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#primaryimage","url":"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2023\/01\/GettyImages-1242428544.jpg","contentUrl":"https:\/\/www.aspistrategist.ru\/wp-content\/uploads\/2023\/01\/GettyImages-1242428544.jpg","width":1024,"height":683,"caption":"This photo taken on July 20, 2022, shows construction workers crossing a road in Shenzhen, in China's southern Guangdong province. (Photo by Jade GAO \/ AFP) (Photo by JADE GAO\/AFP via Getty Images)"},{"@type":"WebPage","@id":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/","url":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/","name":"Despite the rhetoric, China\u2019s economy is struggling | The Strategist","isPartOf":{"@id":"https:\/\/www.aspistrategist.ru\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#primaryimage"},"datePublished":"2023-01-29T19:00:40+00:00","dateModified":"2023-01-27T04:18:22+00:00","author":{"@id":"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/ed62d6c07f0016998ba37db162b7e9d1"},"breadcrumb":{"@id":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#breadcrumb"},"inLanguage":"en-AU","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.aspistrategist.ru\/despite-the-rhetoric-chinas-economy-is-struggling\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.aspistrategist.ru\/"},{"@type":"ListItem","position":2,"name":"Despite the rhetoric, China\u2019s economy is struggling"}]},{"@type":"Person","@id":"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/ed62d6c07f0016998ba37db162b7e9d1","name":"Minxin Pei","image":{"@type":"ImageObject","inLanguage":"en-AU","@id":"https:\/\/www.aspistrategist.ru\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/ca20d7958a15eae38b3463a2213f7604?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/ca20d7958a15eae38b3463a2213f7604?s=96&d=mm&r=g","caption":"Minxin Pei"},"url":"https:\/\/www.aspistrategist.ru\/author\/minxin-pei\/"}]}},"_links":{"self":[{"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/posts\/77648"}],"collection":[{"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/users\/584"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/comments?post=77648"}],"version-history":[{"count":2,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/posts\/77648\/revisions"}],"predecessor-version":[{"id":77652,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/posts\/77648\/revisions\/77652"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/media\/77651"}],"wp:attachment":[{"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/media?parent=77648"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/categories?post=77648"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aspistrategist.ru\/wp-json\/wp\/v2\/tags?post=77648"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}