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The Chinese grand strategy: an overview of the causes and consequences of the Belt and Road

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The Belt and Road Initiative (BRI) is a grand development plan adopted in 2013 by the People’s Republic of China (PRC). It involves over a thousand projects investing in several international organisations and countries in Asia, Africa, and Europe. The main activity is to develop infrastructure for transportation by land and sea from China to various regions of the world. The BRI was designed to promote connectivity and trade between different continents, as well as to create new jobs and stimulate economic growth.

This paper seeks to identify the causes and consequences of the Belt and Road Initiative while taking into consideration that it is a relatively new and on-going strategy; hence some implications may not be precisely predictable yet. It will firstly focus on the economic and political factors that favoured the implementation of this plan, including what could be perceived as the main objectives the Chinese government seeks to achieve. This essay will later analyse the political and economic impact of the BRI in China and the other countries involved, including current risks and obstacles that may arise. In this section of the paper, consequences will be differentiated into two categories: the first subsection will focus on the effects, while the second will identify and examine the challenges that may be encountered.

Causes

The decision to adopt the Belt and Road Initiative was influenced by several factors that are subject to interpretation according to diverse views of the world. For instance, a western perspective would explain the objectives of the BRI as merely political and strategic, with the main aim of increasing China’s influence around the globe. On the contrary, the Chinese government claims it was principally designed to address issues facing the national economy and to improve connectivity among different regions of the world. The potential reasons behind the implementation of the BRI can thus be explained in both economic and political terms.

 

Economic factors

The first factor to highlight is the economic slowdown in China since 2012, which could justify the need for a grand strategy to recover and boost the economy. The government especially needed to deal with the country’s industrial overcapacity and stagnating exports. The low domestic demand was inadequate to deal with the high level of production, and therefore China needed to improve connectivity with developing economies to conquer new markets around the globe. The Belt and Road Initiative was thus conceived to improve trade and cooperation between different regions and continents of the world. According to the World Bank, the BRI will succeed to increase foreign investment and improve living conditions in the participating countries. A further benefit is the removal of the obstacles to commerce, such as trade barriers, which would benefit all governments involved. In fact, the reductions in transport costs and trade liberalisation attributed to this plan are estimated to generate large GDP benefits for countries along the BRI corridor.

Furthermore, the BRI reaches regions of the world that were marginalized from globalisation, and it does this by developing transport networks and thus facilitating trades with those countries. For instance, the project of the China-Pakistan corridor attempts to reduce the distance between the PRC and the Middle East: from the current 12.900 kilometres by sea, the distance would be shortened to 3000 kilometres by land. This point brings us to another factor to consider, which is China’s need to mitigate its energy security concerns, as the country’s demand has been rising and almost 60% of the oil reserves are located in the Middle East. Hence, the PRC sees the Belt and Road Initiative also as an opportunity to obtain regular energy supplies in the fastest and most secure way.

 

Political factors

The Chinese government aims to use economic cooperation also to address challenges in both domestic and foreign policy, such as the political tensions with neighbouring countries, especially those in Central Asia. The BRI could serve as a means to connect Xinjiang with its central Asian neighbours and Europe, while also mitigating perceived threats of terrorism and separatism originating from this region.

It could be also argued that while the US were choosing a rather isolationist approach, China saw the opportunity to achieve global governance and become the new model to follow. Osnos suggested that “as Donald Trump surrenders America’s global commitments, Xi Jinping is learning to pick up the pieces”, implying the Chinese government has a great opportunity to gain global leadership, whereas the US are slowly retreating. This is plausible since one of the main drivers of the BRI is considered to be China’s desire to create a new silk road: a new Sino-centric network of economic, political, and security relations, that would promote China’s vision of global governance. As a result, this strategy could effectively enhance its political power and influence over other countries, hence improving the national image and soft power.

Indeed, Summers argues that it could be compared with the US Marshall Plan for Europe in the aftermath of the Second World War: in the same way as USA gained geopolitical influence over Western Europe with this initiative, the BRI could allow China to gain influence over several countries in Europe, Africa and Asia.

Another element to include is the so called ‘String of Pearls’ theory, which represents China’s potential intentions in the Indian Ocean. The Belt and Road Initiative will allow the country to establish ports in maritime routes to increase influence in the Indian Ocean, especially since India’s aggressive maritime strategy may contrast with China’s objectives. An important location that affects China’s affairs and influence over the ocean is the Malacca Strait, which is controlled by Singapore and protected by the US military. This poses a dilemma to the Chinese government, and the BRI seeks to solve this problem by building the Karat Canal in Thailand. In this way, the Indian Ocean and the South China Sea will be successfully connected, and China would reduce its dependence on the Strait of Malacca.

Consequences

As previously introduced, it is complicated to effectively determine the consequences, given that many BRI projects are on-going or have not started yet. However, it is possible to identify the immediate and estimated effects concerning China and the other countries involved. In addition, we can detect the risks, including the repercussions that may arise in years to come if the challenges are not adequately addressed.

 

Effects

An immediate consequence is the economic growth in both China and the countries along the BRI corridor, as well as the creation of new employment: it is estimated that almost 300 thousand jobs were created since the start of the project. In addition, a report published by the World Bank calculated that the BRI-related investments could drastically reduce the rates of global extreme and moderate poverty. Contributions to the Chinese plan are thus estimated to increase, especially the overseas direct investments (ODI). However, some scholars argue that, rather than improving economic conditions in foreign countries, the increase of ODI will mainly enhance China’s soft power over the countries involved in the initiative.

Another projected and expected result is the improvement of the relations between China and the EU, which will allow the increase of trade and investments between these two regions of the world, hence also improving the economic stability of the old continent. Therefore, the EU could benefit from the Belt and Road Initiative, as well as have the opportunity to enhance its global influence.

One can argue the immediate effects of this plan are beneficial to all the governments involved, but it is also true that the majority of the projects are assigned to Chinese companies, rather than foreign ones. Freymann also argues that many Chinese corporations are exploiting the Belt and Road Initiative brand as a shortcut to get funds from Chinese state banks. Labour and manpower are also mainly Chinese, and therefore the BRI might not create much employment in foreign countries. In addition, the standards we are accustomed to, such as workers’ rights, may not be the same under Chinese supervision: in fact, many African countries are starting to put up resistance against certain projects because of low wages and poor working conditions.

Challenges

Along with the economic and political consequences, there are also risks and obstacles to take into account. The most imminent threat originates from the outbreak of Coronavirus, which affected more than half of the BRI projects. The Chinese government has announced that the initiative will adapt to this circumstance: more resources will be put on public health, environmental sustainability, and technology, in order to facilitate its progress and attract more partners. However, it is complicated to establish how these strategies will be implemented, and what will be the long-term impacts of the Covid-19 crisis.

A crucial challenge is the environmental impact, as the large-scale construction of several infrastructure could have negative effects on biodiversity, such as increased wildlife mortality and restrictions of animal movement. In addition, transport is estimated to increase carbon dioxide emissions by up to 7 percent in the countries where production will expand. The various projects could also create pollution of various sources, such as noise, chemicals, and light, which would seriously affect the ecosystem in the areas involved. This aspect should thus be getting more attention from policymakers and the BRI management, in order to successfully mitigate the several environmental risks before the situation deteriorates.

An additional aspect to consider is the debt accumulated by borrower countries. Since 2013, China has made several loans to many governments, and there is the risk that it would use that debt to exert political and economic influence on those nations. According to a policy paper published by the Center for Global Development, eight countries are estimated to be pushed into a debt crisis because of BRI-related loans. Hence, the PRC could make use of a strategy commonly referred to as ‘dept-trap diplomacy’. An example is the case of Sri Lanka, which could not repay its debts and had to hand over an important port to a Chinese state company for the duration of 99 years.

Moreover, in a very costly and global plan such as the BRI, corruption is another factor that requires a deep focus. According to the World Bank, bribery in transport projects “can account for 5 percent to 20 percent of transaction costs”. Therefore, corruption is one of the main risks that the Chinese government should manage in order to guarantee transparency in the BRI projects. Such concern is often associated with the Asian Infrastructure Investment Bank (AIIB), which could support the Belt and Road Initiative undermining good norms of governance.

The last aspect we should focus on involves perceived threats to human security. Security-related challenges are crucial to address, and particularly in this case. Some BRI corridors are located in countries affected by ongoing conflicts, extremism, and terrorism. Therefore, the level of risk in these areas is very high, especially if we consider that the Chinese government is often accused of discrimination towards ethnic and religious minorities. It is also believed that the PRC may not have sufficient military power to deal with this issue, hence failing to protect building sites and infrastructure, such as roads and railways along the route.

Conclusion

Despite the Belt and Road Initiative being in constant development, we can already infer it will have serious economic and geopolitical implications. Two diverse visions of the world interpret the purpose of the BRI differently, and both perspectives are based on valid arguments. China will most probably see a rise in its economic influence and will gain strategic dominance across three continents. It will use the BRI for its own benefit and recovery, but it will also improve relations and cooperation with many countries, as well as create employment and reduce poverty. The Chinese government will create a new ‘Silk Road’ to invest in regions of the world that were left out of globalisation and trade, while also enhancing its national image and exerting political influence in order to secure Chinese goals. While Trump-led USA turned towards protectionism, China has opened its market with the rest of the world and has taken advantage of the situation. The BRI could effectively allow the Chinese government to take control of most of the maritime and land routes across Africa, Asia, and Europe.

However, it is still early to determine whether the BRI will be successful or not, as it will also depend on its impact in the countries involved. After the Coronavirus outbreak, some countries may not decide to invest in projects that were seriously affected by the Covid-19 crisis, which could lead to further complications in the following months. Foreign governments could choose a different approach towards the legitimacy of the Belt and Road Initiative, especially if we consider the ambiguity in some aspects of the Chinese plan. For instance, the US led by Biden have adopted a different approach towards China’s global initiative, as opposed to Donald Trump. In addition, there are environmental and security challenges to address, that could drastically affect the progress of the BRI.

Nevertheless, it is premature to state that these obstacles are being overshadowed by the PRC for mere political agenda because the Chinese government may decide to take further measures and find valuable solutions in the years to come. As a result, future events and developments will be helpful to better understand and evaluate the implications of this grand strategy, as well as China’s position in the global political and economic landscape. 

Born and raised in Italy, Federico holds a BSc in International Relations and Diplomacy from the University of Derby, and a MSc in International Security and Risk from the University of Southampton. He has worked and volunteered in various countries, including Italy, the UK, Turkey, and the Czech Republic, and was previously a research assistant at the International Institute for Counter-Terrorism (ICT). He now collaborates with youth-led initiative Council for Global Cooperation as a Research Director, as well as ATLAS of Today’s World as a General Editor. He has also published articles and short essays for E-International Relations, Prague Morning, Kafka Desk and Small Wars Journal.

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Xi Jinping’s visit to Russia and America’s hostile policy towards China-Russia rapprochement

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The visit of Chinese President “Xi Jinping” to Russia will be organized, which will most likely take place after the end of the sessions of the Chinese Parliament, which are traditionally held annually in early spring in February of each year.

  It seems to me that the Chinese comrade “Xi” himself deeply admires Putin on a personal level.  But it seems to me that the most worrying thing about Putin himself is that China, despite the strength of its relationship with him, is also seeking to set a high price for support. For example, Beijing wants to restrict Russia’s highly lucrative arms sales to India, a sworn enemy of China across the Himalayan range on the Sino-Indian border.  Despite this, the Chinese company, Huawei, is building Russian fifth-generation networks, while Russia requires Chinese cooperation on everything from aircraft parts to currency swaps in the local currencies of the two parties.

 Relations between Russia and China, which the two sides describe as a “borderless” partnership, have gained great importance after the launch of the Russian invasion of Ukraine on February 24, 2022. While Western countries imposed unprecedented sanctions on Russia, China refrained from condemning Moscow’s military crackdown and merely emphasized the need for peace. Russian energy exports to China have increased dramatically since the outbreak of the war, and Moscow has become the single largest supplier of oil to China.  However, there are very serious limits to the pattern of “boundless” relations between China and Russia.  For now, China assures Western countries that at least it does not sell weapons or aircraft parts to Russia.  Beijing is desperate not to fall victim to the same sanctions imposed on the Russians after the Ukraine war.  So it sets limits to the relationship with Moscow.

 Beijing has so far been careful not to provide direct support that could make it vulnerable to Western sanctions over Russia’s war against Ukraine. At a summit held in September 2021 in Uzbekistan, Putin acknowledged the concerns of his Chinese counterpart “Xi Jinping”, about the situation in Ukraine.

 The visit of Chinese President “Xi Jinping” to Russia is an affirmation of Beijing’s solidarity with Russia during the continuation of its military campaign in Ukraine. This visit will show the world how close Russian-Chinese relations are.

  With China’s readiness, according to what Beijing officially confirmed, about its willingness to increase strategic cooperation with Russia against the background of the difficult situation in the whole world.  According to Chinese state media analysis.

  In a previous video call between Presidents “Xi Jinping” and Putin, it was confirmed that the road to peace talks on Ukraine will not be easy, and that China will continue to uphold its objective and fair stance on the issue, according to the official China Central Television broadcast in Beijing.

  It is expected that Russian gas supplies to China will increase after that visit.  This was confirmed by Russian President “Putin” that Russian-Chinese cooperation is increasing as a factor of stability in the international arena with Putin’s statements about the importance of continuing joint military cooperation with Beijing, to enhance regional security and work to develop it in the future.

 The visit of Chinese President “Xi Jinping” to Russia will be a joint declaration of the “borderless” partnership, which was announced between the two parties during the February 2022 summit, at the time of Beijing’s hosting of the Winter Olympics, as both sought to challenge the influence of the United States of America and pressure for a multipolar world.

  Here, Moscow and Beijing present themselves as a geopolitical counterweight to the United States of America and its other allies. Moscow and Beijing also conducted several joint military maneuvers and exercises in their nearby areas of influence, including naval maneuvers in the East China Sea, as a warning message to America and its allies about the Taiwan Strait.

  Likewise, during President Xi Jinping’s visit, China will try to increase the benefit from Russian supplies of gas to the Chinese economy, given that Beijing is the main consumer of hydrocarbons, at a time when the Europeans are trying to get rid of their dependence on Russian energy.

Here, China holds the cards when it comes to Russian gas.  Just before invading Ukraine, Putin signed an agreement with Xi to increase Russian natural gas exports to 48 billion cubic meters annually as a future deal, instead of capping a modest 4 billion cubic meters in 2020.  Russia is also planning to build a new pipeline, known as (Power of Siberia 2), which may lead to the transfer of Russian gas exports from Europe more easily to China.

 Chinese President Xi Jinping’s visit to Moscow will also reflect an affirmation of Beijing’s refusal to publicly condemn Russia’s war against Ukraine, with China instead accusing the United States of provoking Russia by pressing for NATO’s expansion to the east into the regions.  direct Chinese Russian influence.

   But on the other hand, with no indications that the conflict in Ukraine is about to end at the present time, President Xi has taken steps to distance himself from his Russian counterpart, including China’s signing of a statement during the G-20 summit, in November 2022 in Bali.  Indonesia, China, along with its other member states, reaffirmed their strong condemnation of the war in Ukraine.

 The summit that took place between President Xi Jinping and his counterpart, US President “Joe Biden”, on the sidelines of the G20 meetings, also helped ease tensions between the two largest powers in the world, as the two leaders jointly warned the Kremlin in Russia, because of a Russian statement,  About the imminent outbreak of a nuclear war against Ukraine.

 The first American comment on the event of Chinese President Xi Jinping’s visit to Russia came through a State Department spokesperson, in a statement, to express Washington’s concern about China’s alliance with Russia, in light of Moscow’s continued brutal and illegal invasion of Ukraine, according to the official American  statements.

 Here came the United States and Europe’s warning to China of the consequences of providing any military assistance to Russia in its war against Ukraine or helping it evade internationally imposed sanctions.

 Here came the joint declaration between Moscow and Beijing to continue strengthening their strategic and comprehensive partnership relations, emphasizing the rejection of attempts to build a unipolar world dominated by Washington, because that American hegemony has acquired an ugly form in recent times.  The Chinese Foreign Ministry’s response also came with an emphasis on China’s support for Russia in strengthening its position as a major power in the international arena.

During Chinese President Xi Jinping’s visit to Russia, it will be emphasized that China is ready to continue to provide mutual support to Russia on issues related to their core interests, such as:

  (Sovereignty and security, intensification of strategic coordination between the two countries, and strengthening communication and coordination in the main international and regional organizations in whose membership they participate, such as: “The United Nations, BRICS Group, Shanghai Cooperation Organization”)

  Here, Russian President “Putin” opposes any attempts by any external forces to interfere in China’s internal affairs, such as the situation in Xinjiang, Hong Kong and Taiwan, with his Chinese counterpart, “Xi”, asserting that Beijing has always made independent judgments regarding Russia, foremost of which is its war against Ukraine.

 During the visit, Chinese President “Xi Jinping” is expected to call on all parties to the conflict between Russia and Ukraine to find a peaceful solution, with the Chinese leadership willing to play a constructive role in this process. And while the Chinese government called earlier to adopt peace between Russia and Ukraine, it stressed at the same time its understanding of Russia’s security concerns, and its condemnation of the supply of weapons from the West to the capital, “Kyiv”.

  At the end of February 2022, Beijing abstained from voting on a UN Security Council resolution condemning the Kremlin’s actions regarding Ukraine.  And this is despite Washington’s pressure on Beijing to adopt a position more in line with the Western position, but China refused to take any hostile stances or measures towards Russia, which it always describes as a “strategic partner”.

 Hence, we conclude the extent of the great Chinese political solidarity with Moscow. With the increase in the overall Chinese trade movement with the Russian side, and China essentially abandoning Ukraine’s support despite their previous relations in favor of Moscow, Beijing also expanded its financial transactions with the Russians without using the currency of the dollar or the euro, and doubled future cooperation for the development of military technology with Russia while conducting the Joint Russian-Chinese military exercises in the Pacific region.   In my personal belief, the American concern itself is not from a joint official Russian-Chinese alliance, but rather the fear of the compatibility of the policies of the two countries, which follow two different authoritarian regimes according to the classification of America and the West, and oppose the world order that the United States of America controls internationally in the recent time. The two parties together may impede the ability of the United States of America to implement some of its international goals, and thus influence the American influence internationally.             

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Chinese Communist Party and the path of “high-quality development” at Guangdong Province

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A night view of Shenzhen, Guangdong province, on March 10, 2018. (PHOTO / VCG)

During the meeting of “Huang Kunming”, Secretary of Guangdong Provincial Party Committee mentioned that it is significant for Guangdong embark on a path of high-quality development fit for its own situation. According to my highly understand of China’s high-quality development and analysis to the nature of the Chinese society and the polices of the Communist Party of China regarding the development is meaning (all-round building a strong modern socialist country) and all-round rejuvenation of the Chinese nation still need to rely on development.

 With the continuous development of the Chinese economy and the deepening of reforms, China put forward a new expression of “high-quality development” for the first time at the 19th National Congress of the Communist Party of China in 2017, which indicates that China’s economy has moved from a stage of rapid growth to a stage of high-quality development.

 Changing China’s economic development strategy is an inevitable choice in line with the law of development and the demands of its development. Now, China is seeking to change its previous development pattern of relying on a large number of factors of production to focus more on quality and efficiency.  It has begun to adhere to the implementation of the new development philosophy that emphasizes innovative, coordinated, green and open development for all, and to build a new development pattern that relies on domestic trade and promotes integration between domestic and foreign trade to enable the Chinese society to complete the building of a strong modern socialist country in an all-round way, Chinese side should stick to advancing high-quality development as the top priority, as President Comrade “Xi Jinping” stressed in the report.

 High-quality development mainly depends on the economy’s vitality, innovation and competitiveness.  In order to improve these capabilities, China is accelerating the implementation of the innovation-driven development strategy, intensifying its efforts to achieve a high level of self-reliance in scientific and technological research, mobilizing forces and focusing on solving intractable problems in original and pioneering science and technology research to achieve breakthroughs in some crucial and pivotal technologies, which are guided by these strategies, China has achieved good results in manned space industry, lunar and Mars sounding, deep-sea and land exploration, supercomputers, satellite navigation, quantum information, electro-nuclear technologies, large-scale passenger aircraft, medicine, biopharmaceuticals and other fields over the past years, and joined the ranks of innovative countries in the world.

 Green development is an important symbol of the transition of China’s economy from the stage of rapid growth to the stage of high-quality development. In recent years, China has pushed the green transition to a development mode, implemented the comprehensive rationalization strategy, developed green and low-carbon industries, and advocated green consumption.

  The bright future of China’s economy stems from more flexible and high-quality development. In 2021, China calmly responded to changes in the world as well as the COVID-19 epidemic, took new steps to build a new development pattern, achieve new results in high-quality development, and achieve a good start for the 14th Five-Year Plan. China has maintained a leading position in the world in economic development and in epidemic prevention and control, accelerated the growth of national strategic scientific and technological forces, improved the flexibility of the industrial chain, continued to deepen supply-side structural reforms, and made solid progress in the green transformation of the low-carbon economy and prosperity subscriber.

  Here, with the strong leadership of the Communist Party of China, the significant advantages of the socialist system with Chinese characteristics, the technological foundation accumulated since reform and opening up, the extremely large market advantage and domestic demand potential, and with huge human capital and human resources, the Chinese economy will continue to grow steadily on the path of high-quality development, enabling China to contribute in achieving a steady and stable progress in the recovery of the global economy.

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China’s Deflating Population: The Economic Marvel in Eclipse?

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So China’s population shrank last year. I admit my first instinct was … well, isn’t this a good thing? I mean, during the entire 1960s and 1970s, global discourse misted around how the world population kept growing beyond the finite resources of this world. And how food scarcity and poverty would create a social depression. China, with a population of roughly 1.4 billion people, was specifically a focal point of population reduction strategies. After the widespread catastrophe of the Great Leap Forward, a debilitating social program orchestrated by Mao Zedong in the late 50s, China’s population was on the up and up in the following decade, to the point that the infamous ‘One-Child Policy’ was introduced in the late 70s to inhibit the burden of a growing population – and concomitant poverty. Since then, however, China has dynamically transformed into an economic powerhouse – a factory floor for global manufacturing. And here lies the answer to this population conundrum: Shrinking population in China is a problem now!

According to the data released by the Chinese government last week, China’s population contracted by circa 850,000 people in 2022; with 9.56 million births against 10.41 million deaths, it was the first time in more than half a century that deaths outnumbered births in China. The initial thought would be to blame it on the pandemic. But that would be a blinkered assumption without gauging the stunted birth rate. It was the sixth consecutive year that the number of births fell, down from 10.6 million in 2021, according to the National Bureau of Statistics. Many demographers and statisticians warned for years about a population decline on the cards, albeit much later in this decade. This presage was why the government reposed its one-child policy in 2016 and extended the limit to three children in 2021. Local governments offered tax rebates and outright cash handouts to couples having children. The source of anxiety was partly social and partly economic – or maybe socioeconomic is the correct juxtaposition.

China is a rising economic power, the world’s second-largest economy, and the strongest contender to dethrone American supremacy. But in listing all the superlatives, we sometimes forget that China is still a developing economy. Despite its phenomenal evolution from endemic poverty, its average population still earns less than the average earnings in advanced economies. And the shrinking population is a two-pronged issue that could constrict China, like other leading developing economies, into a middle-income trap.

Just by simple inference, we can judge that a declining population is also an aging population. Impressive modernity in China’s healthcare system has led to an increase in life expectancy. Meanwhile, a decades-long hiatus in birth-conducive policies and changed mores of young Chinese couples, often antipathetic to having children altogether, have led to a sharp decline in births. A combination of these factors has invited a conspicuous outcome: Shrinkage in China’s working-age population. In fact, China’s working-age population has been in decline since 2015; according to a government spokesman, it could fall to roughly 700 million (approximately 23%) by 2050. This factor would be particularly problematic for China, which has long been a competitive labor market for manufacturing heavyweights like Apple and Microsoft. But moreover, a bulging elderly population amidst falling tax receipts would pose a challenge to government finances, especially given the comparably underdeveloped social safety net programs in China. Therefore, either taxes ought to be raised sharply or state pensions to old-age dependents would hit the skids – a spartan policy dilemma either way.

We can draw apt comparisons from Japan – the world’s third largest economy – which has notoriously suffered from a lopsided aging population and accompanying anemic economic growth since the asset bubble burst of the 1990s. I mean, China’s real estate market does look like a financial crisis just waiting to happen. But post-boom Japan has tried virtually every bizarre economic strategy – from negative interest rates to yield curve control – yet has failed to spark demand-led inflation. Strangely, however, China has sustained its bustling economy on prohibitive rates of investment rather than consumer demand, which has remained relatively lukewarm due to policymakers’ reluctance to pass the complete scope of economic growth to households. Nonetheless, a contracting labor force would perhaps accelerate the exodus of manufacturing from China unless the government finds alternatives to sustain China’s unrivaled productivity levels.

We could blame China’s ‘zero Covid’ policy for strangling economic growth. It is no surprise that China’s economy grew by a modest 3% in 2022, its slowest rate in nearly four decades, barring 2020. Intermittent lockdowns and pedantic mass testing regimes cast a pall over economic activities. And higher interest rates imposed by the Federal Reserve and other central banks have dampened global demand and diluted appetite for Chinese imports. According to government officials, year-on-year Chinese exports fell by 9.9% in December. While an economic turnaround is widely expected later this year, a falling working-age population; a skyward old-age dependency ratio; and the ongoing trade tussle with the United States could cost China many more decades to supersede the American edge. However, China has been an iridescent success story, an economic miracle of sorts. And therefore, if the Chinese Communist Party (CCP) could somehow prioritize economy over national security; social reforms over governmental control; and collaboration over confrontation, I reckon China can again defy the odds and achieve its dream.

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