1/10
Chinese and foreign analysts who have made similar claims over the years as this Xinhua Commentary never distinguish between types of "bearish" views. But their approach, if taken seriously, would actually makes things worse for China.
news.cn/english/2021-1…
Chinese and foreign analysts who have made similar claims over the years as this Xinhua Commentary never distinguish between types of "bearish" views. But their approach, if taken seriously, would actually makes things worse for China.
news.cn/english/2021-1…
2/10
While I agree that those who have predicted imminent political, financial or social collapses have gotten it wrong — mainly because they failed to understand the structure of the Chinese financial system — for well over a decade the most sophisticated critique was not...
While I agree that those who have predicted imminent political, financial or social collapses have gotten it wrong — mainly because they failed to understand the structure of the Chinese financial system — for well over a decade the most sophisticated critique was not...
3/10
that China was about to collapse (which was always very unlikely) but rather that the Chinese economy was locked into an unsustainable process, and that the longer it took to adjust, the longer and more difficult the adjustment would be.
that China was about to collapse (which was always very unlikely) but rather that the Chinese economy was locked into an unsustainable process, and that the longer it took to adjust, the longer and more difficult the adjustment would be.
4/10
This is a very different prediction. In the past — e.g. the SOE reforms of the 1990s, the banking crisis of the 2000s, SARS in 2003, the collapse of China's trade surplus in 2009, COVID, etc. — whenever China faced a problem that threatened the pace of its economic...
This is a very different prediction. In the past — e.g. the SOE reforms of the 1990s, the banking crisis of the 2000s, SARS in 2003, the collapse of China's trade surplus in 2009, COVID, etc. — whenever China faced a problem that threatened the pace of its economic...
5/10
growth, Beijing always responded by accelerating debt creation and pumping up property and infrastructure investment by enough to maintain targeted GDP growth rates. It didn't adjust, in other words, but rather goosed growth by exacerbating the underlying imbalances.
growth, Beijing always responded by accelerating debt creation and pumping up property and infrastructure investment by enough to maintain targeted GDP growth rates. It didn't adjust, in other words, but rather goosed growth by exacerbating the underlying imbalances.
6/10
That is why it had always been "successful" in seeing off a crisis. But when the main problem threatening further growth becomes soaring debt and the sheer amount of non-productive investment in property and infrastructure, it is...
That is why it had always been "successful" in seeing off a crisis. But when the main problem threatening further growth becomes soaring debt and the sheer amount of non-productive investment in property and infrastructure, it is...
7/10
obvious, or should be, that accelerating debt creation and pumping up property and infrastructure investment can no longer be a sustainable solution. All this can do is worsen the underlying imbalances and raise further the future cost of adjustment.
obvious, or should be, that accelerating debt creation and pumping up property and infrastructure investment can no longer be a sustainable solution. All this can do is worsen the underlying imbalances and raise further the future cost of adjustment.
8/10
Anyone with some basic knowledge of economic history will have seen this many times before. As rapid unbalanced growth continues over time, two things always seem to happen. First, vested interests (and political apologists) will insist that this case is...
Anyone with some basic knowledge of economic history will have seen this many times before. As rapid unbalanced growth continues over time, two things always seem to happen. First, vested interests (and political apologists) will insist that this case is...
9/10
unlike previous cases, and the fact that the process has gone on for so long proves that it isn't unsustainable. And second, as the process continues, the imbalances become greater and the ultimate resolution more difficult and costly.
unlike previous cases, and the fact that the process has gone on for so long proves that it isn't unsustainable. And second, as the process continues, the imbalances become greater and the ultimate resolution more difficult and costly.
10/10
The point here isn't that there is nothing Beijing can do to reduce the adjustment cost. It is that it can only do so with a radical transformation of its growth model. Pretending otherwise, as this Xinhua article does, simply reinforces the historical pattern.
The point here isn't that there is nothing Beijing can do to reduce the adjustment cost. It is that it can only do so with a radical transformation of its growth model. Pretending otherwise, as this Xinhua article does, simply reinforces the historical pattern.
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