As expected, Chinese President Xi Jinping has been given an unprecedented third five-year term. More surprising was the absence of any sign that Xi intends to revise the policies that have done so much economic damage in recent years.
Judging by the reporting from the Communist Party of China’s 20th National Congress, Xi Jinping, newly anointed
to an unprecedented third term as president, is tightening his
political grip and strengthening the CPC’s control over society. Can
successful economic development continue in this environment?
I have been thinking for many months now
that one day, I would wake up to read that China was revisiting its
zero-COVID strategy, overhauling the CPC’s interaction with domestic
private business, truly reforming the country’s
hukou system of
residence permits, and rethinking crucial aspects of its Belt and Road
Initiative (BRI) and its recent tactical stance on international
governance. It is proving to be a very long wait.
At a meeting with a
senior Chinese official a few months ago, I jokingly said that my
30-plus years of “understanding” China may have been a fluke, because I
couldn’t comprehend some policies the country had adopted in recent
years. The only way I could rationalize them was to conclude that they
must be part of some tactical maneuver to neutralize factions within the
CPC’s upper echelons ahead of the Congress. Judging by who the Congress
has chosen
to be next to Xi in the new leadership, there have certainly been
further purges of opponents – and very few signs of a reversal of the
policies of recent years.
Unless the post-Congress days and weeks produce a big surprise, I see growing dilemmas emerging for Xi and the CPC. In the BRICs analysis
(the purported rise of Brazil, Russia, India, and China) that my
then-colleagues and I produced a generation ago, the decade 2021-30 was
supposed to be when China’s economy closed in on the US in nominal terms.
This was why the BRICs economies collectively might go on in the next decade to become larger than the G7, which would of course represent an enormous change to the modern world order.
This assumed that countries would achieve their long-term potential
productivity rate, because Chinese GDP growth would decelerate as its
labor-force growth peaked, implying that most of the 4.5-5% GDP growth
we had assumed would reflect productivity gains. This growth rate is
consistent with what China has stated is both required and desired to double its GDP per capita by 2035 from the 2020 level....
more at Project Syndicate
© Project Syndicate
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article