By Rajan Menon:
Between
1978, the year Deng Xiaoping’s sweeping economic reforms were launched,
and 2011, China’s GDP increased by an average of 10 percent annually, three times that of the global economy. Now the boom times may be over.
By mid-2013, economic growth had slowed to 7.7 percent. That’s still a roaring pace compared to the rest of the world. Europeans, Americans and even Japanese might say about China’s slippage, “We should all have such problems.” Still, in thirty-five years, the Chinese polity hasn’t had to handle a prolonged economic slowdown and one may be in the offing. Hence the debate on what the deceleration could portend should it get worse and linger.
Is China headed for upheaval? The argument that it is seems plausible. Eye-popping growth rates and the accompanying increase in living standards—and of course the state’s massive machinery of repression—have been critical to maintaining political stability and public support for the Communist Party. Or is Beijing so skillful, so flush with foreign-exchange reserves—and hence with the capital needed for priming the economy and managing financial crises—that slower economic growth is no big deal? Don’t look to the experts for enlightenment on which take is true: they see the same data but draw different conclusions.
By mid-2013, economic growth had slowed to 7.7 percent. That’s still a roaring pace compared to the rest of the world. Europeans, Americans and even Japanese might say about China’s slippage, “We should all have such problems.” Still, in thirty-five years, the Chinese polity hasn’t had to handle a prolonged economic slowdown and one may be in the offing. Hence the debate on what the deceleration could portend should it get worse and linger.
Is China headed for upheaval? The argument that it is seems plausible. Eye-popping growth rates and the accompanying increase in living standards—and of course the state’s massive machinery of repression—have been critical to maintaining political stability and public support for the Communist Party. Or is Beijing so skillful, so flush with foreign-exchange reserves—and hence with the capital needed for priming the economy and managing financial crises—that slower economic growth is no big deal? Don’t look to the experts for enlightenment on which take is true: they see the same data but draw different conclusions.