This Tuesday could prove uncomfortable for China’s leadership. The Human Rights Council’s country review will be held at the League of Nations Palace in Geneva. This time, particular focus will be on Tibet. Marcel Grzanna predicts that Beijing will probably have to expect unpleasant questions: The sinicization of Tibetans has reached a new dimension in the past five years. Resettlement programs and a boarding school system, into which almost one million children are forced, divide families and uproot the next generation.
And the German government should no longer turn a blind eye to it either. In a personal letter to German Foreign Minister Annalena Baerbock, the human rights spokesperson for the Christian Democrats in the Bundestag, Michael Brand, appealed for the German delegation to address “this gigantic violation of the rights of children and young people and their families” during the debate.
Meanwhile, the European Union has come up with a novelty. On Wednesday, the EU will combine security and trade issues in one strategy for the first time and present a package for the EU’s economic security. Even if the People’s Republic is only mentioned once, the goal is clear: Brussels wants to better protect Europe’s technologies from China.
Amelie Richter and Till Hoppe from Europe.Table have taken a look at the draft and identified its key points. Among other things, foreign investments are to be better screened for risks to security and order, the transfer of sensitive expertise by European foreign investments is to be prevented, and research security improved.
What the Chinese government would rather keep quiet about will be discussed today at the League of Nations Palace in Geneva. As part of the Universal Periodic Review (UPR), the periodic country review of the Human Rights Council, China must regularly explain the devastating reports coming out of the country. Tibet will receive special attention this time.
The sinicization of the Tibetan people has reached a new dimension since the last UPR around five years ago. Resettlement programs and a boarding school system, into which almost one million children are forced, divide families and uproot the next generation. Chinese security forces and the judiciary severely punish even the slightest suspicion of political dissent. Human rights organizations deplore the systematic eradication of Tibetan culture and language.
Ten UN member states have submitted dozens of questions in advance of the proceedings that explicitly concern the situation of the Tibetan minority. Even Germany increasingly peeks its head out when it comes to confronting China and demands detailed information. What percentage of Tibetan children are part of the boarding school system? Do the families have a choice? What happens if families refuse? Germany will also be putting the fate of nine imprisoned Tibetan activists on the agenda by name.
“In these changing times, it is not secondary to specifically name issues such as Tibet, forced boarding schools and the growing phenomenon of transnational repression in such a state review procedure,” says Michael Brand, human rights spokesperson for the CDU/CSU parliamentary group in the German Bundestag. In a letter available to Table.Media, the MP explicitly appealed to Foreign Minister Annalena Baerbock last week to instruct the German delegation to specifically address “this gigantic violation of the rights of children and young people and their families” during the review.
Kai Mueller, Executive Director of the International Campaign for Tibet (ICT) in Germany, called it an encouraging sign. “Tibet is receiving more attention. The countries are taking the situation seriously.” Indeed, China will have to face significantly more questions about Tibet than during the 2018 review process. Beijing will also have to answer questions about forced labor in Xinjiang, Hong Kong, labor law and education.
In mid-December, the European Parliament issued a motion for a resolution calling on the member states of the European Union to look into this systematic assimilation and to raise it specifically with the international community and China. However, nobody expects the People’s Republic to make any serious concessions. Five years ago, China rejected practically every substantial recommendation from UN members.
And yet a lot is at stake in the League of Nations Palace. Every question that China has to answer and every recommendation that is made reflects on the rest of the world’s assessment of the human rights situation in China. It is not so much the Chinese statements that sharpen the perception of the situation in the country as the critical questions raised by the member states. “China’s actions must not become the norm. The international community must uphold the principles of order,” Mueller demands.
This includes maintaining the influence of civil society forces on the UN Human Rights Council. For years, China has been trying to delegitimize international civil society. A few days ago, the newspaper The Geneve Observer reported that Chinese diplomats had asked the United Nations in Geneva not to grant “anti-Chinese separatists” access to Tuesday’s session. “Harassment activities inside Room XX are advised to be handled in a quiet, safe and swift manner so as to avoid disruptions to the review,” the statement said.
China also demands a “special security plan” for its 60-strong delegation. Beijing’s representative presented a list of nearly two dozen Uyghur, Tibetan and Hong Kong activists, which it described as being “of concern.” It called on UN officials to reject all requests from the activists and groups concerned to organize side events. This would also have affected the ICT, which held a briefing on Monday at which three Tibetans were given the opportunity to speak.
China apparently also conducted extensive lobbying in the run-up to the meeting. Reuters reported that China’s mission in Geneva had sent memos to envoys from other countries asking them to praise the country’s human rights record before the committee. Reuters referred to several diplomats and documents.
China also wants to gain control over the language and dispel doubts about the legitimacy of its rule over Tibet in the long term. Tibet should no longer be called Tibet, but Xizang – the name of Tibet in Mandarin. Michael Brand also explicitly pointed out this tactic in his letter to Minister Baerbock.
The specific use of relevant terms such as Tibet, forced boarding school system and transnational repression is “despite all the expected rejections” by the Chinese regime of great importance in order “not to surrender these issues to the repression mechanism that the PR China seems to have established with some success in numerous international bodies, including the UN Human Rights Council.” Brand explicitly asks Baerbock “not to refrain from using the word Tibet.”
The EU Commission will present its vision for economic risk minimization on Wednesday. The economic security package includes initiatives covering five areas. Brussels’ strategy aims to counter China and Russia’s growing readiness to exploit trade and critical supply chains for geopolitical purposes. The draft of the economic security package is available to Table.Media. Bloomberg and Politico had previously reported on the plans.
The publication of the package follows last June’s announcement of a strategy. At the time, however, only Competition Commissioner Margrethe Vestager openly said that Beijing was the focus of efforts. China is only mentioned by name once in the strategy documents. Vestager emphasized that it was a country-independent strategy – but with a “geopolitical filter.”
The package includes initiatives for:
The approach is based on three pillars: “promoting, protecting, partnering.” The strategy also identifies four priority risk categories, including risks in supply chains, physical and cyber security of critical infrastructures, technological security and the risk of instrumentalizing economic dependencies.
Many of the proposals are opinions and recommendations that may take a while to be translated into binding guidelines. How the EU member states adopt the initiatives also plays a role – as many of the points fall within the competence of the EU capitals. The composition of the next EU Commission and how it will pursue the project will also be a key factor. Changes to the draft are also still possible.
The draft states that the new strategy aims to “combat risks to the EU’s economic security.” At the same time, it aims to ensure “that the EU remains a highly attractive destination for business and investment.” The goal is to strengthen the EU’s and member states’ ability to address “ongoing risk assessments related to supply chains, technologies, infrastructure and economic coercion.”
The economic security strategy is generally a first for Brussels. The EU combines security and trade in one strategy for the first time.
A severe earthquake has shaken the border region between China and Kyrgyzstan. According to the US earthquake monitoring service USGS, the center of the 7.0-magnitude quake was in the province of Xinjiang in northwest China. There was no initial word on possible casualties. However, the USGS warned that “significant damage” and fatalities were to be expected. The earthquake occurred shortly after 2 a.m. on Tuesday.
According to AFP news, local TV stations reported that the quake’s tremors could even be felt in the Indian capital, New Delhi, 1,400 kilometers away. The earthquake was also felt in the Kazakh capital, Astana.
Earthquakes repeatedly shake the People’s Republic, some of them devastating. In December, 148 people died in a severe earthquake in the Chinese province of Gansu. It was the most deadly earthquake in China since 2014, when more than 600 people died in the southwestern province of Yunnan. In 2008, a magnitude 7.9 quake in Sichuan province claimed the lives of more than 87,000 people. ari
As the Ministry of Defense in Taiwan announced on Monday, another six Chinese balloons have been spotted in its airspace or its immediate vicinity. China is currently deploying more of these balloons around Taiwan. Of the six balloons now spotted, one passed close to the southern city of Pingtung, the others north of the port city of Keelung, where an important naval base is located.
China has been operating a large balloon program since 2019. It is part of the renewal of the Air Force on behalf of Xi Jinping. Experts say the program is large enough to conduct intelligence operations in dozens of countries for several years with countless surveillance balloons.
In the current case, it is unclear whether the balloons have a military purpose. However, they appear to be part of a campaign against Taiwan to unsettle the inhabitants of the democratically governed island. China significantly stepped up its activities and threats around the presidential election a few weeks ago.
Four Chinese fighter jets and four naval vessels were also spotted around Taiwan on Sunday and early Monday morning, according to the ministry. In response, fighter aircraft, naval boats and land-based missile systems were activated. rad
The narrative that China’s economy is nearing its peak – or has already reached it – has taken hold in Western media. But if you read the doomsayers’ analyses carefully, you will find that many of the reasons they give for their bleak assessments are not new. On the contrary, they tend to highlight precisely the same challenges that economists and commentators have been harping on for at least a decade or longer. If China was not sputtering then, why should we believe it is now?
To be sure, the global context has changed. Perhaps most important, the prevailing narrative about China has turned largely negative, and the West is now far more hostile toward it than it was ten or even five years ago. With the United States working harder than ever to contain China, direct Chinese exports to the US have fallen.
Even so, the “decoupling” of the world’s two largest economies is probably overstated. A recent study by University of California San Diego economist Caroline Freund and her colleagues shows that the US and China are indeed reducing their engagement in some areas. For example, US import growth from China lagged well behind US import growth from other countries for products subject to US tariffs.
But the same study also found that US and Chinese supply chains remain deeply intertwined, especially for “strategic products.” Moreover, the countries from which US imports are growing are often deeply – and increasingly – embedded in Chinese supply chains. In fact, countries seeking to displace China in US supply chains have been increasing their own imports from China, especially in strategic industries.
At the same time, global firms appear to be pursuing a “China+1” strategy, investing in other countries in addition to – but not instead of – China. Chinese companies, for their part, have increased their foreign direct investment in recent years and deployed their own production chains far beyond China’s borders, especially to countries that can avoid punitive US tariffs. This trend is likely to persist, ensuring that Chinese capital continues to flow to the rest of the world.
The doomsayers would likely point out that China is also facing domestic challenges. Beyond unfavorable demographics, China is also grappling with issues like large debts, misallocation of capital, severe pollution, and a troubled property sector. But China’s government has been clearly aware of these problems – and committed to addressing them – for a decade.
China’s program of “supply-side structural reform,” for instance, took shape in 2015 and included tighter financial regulations and increased government supervision of – and intervention in – highly leveraged sectors with excess production capacity. While the program helped to prevent a debt or financial crisis, it also constrained growth in many highly leveraged industries, such as real estate. But the view that a sluggish property sector will trigger China’s economic collapse is overly dramatic.
Chinese policymakers understand that a transition is inevitable in the real estate sector and are committed to ensuring that it occurs smoothly. More broadly, the structural reforms that have already been implemented have boosted China’s economic resilience, and, despite US tariffs, Chinese exports have remained robust. Meanwhile, new sectors – from services to the digital economy and high-tech industries – have been growing fast.
All of this helps to explain why China achieved 6.6 percent three-year-average growth in 2017-19. While the COVID-19 pandemic slashed growth in 2020, the economy rebounded strongly in 2021, growing at a rate of 8.1 percent. And the growth rate in 2023 is most likely to be slightly over 5 percent; even a round of lockdowns in 2022 did not prevent growth.
This does not mean that China emerged from the pandemic unscathed. Three years of reduced opportunities to generate income limited Chinese consumers’ ability to fuel a rapid post-pandemic recovery. The government must now redouble its efforts to support domestic demand and job creation by pursuing more expansionary monetary and fiscal policies over the next two years.
Chinese policymakers must also work to accelerate the liberalization of some industries. For example, productive services where private and foreign capital is barred from entering must be freed of these restrictions as soon as possible. Fortunately, there are signs that the authorities are aware of this imperative: financial regulators just granted a bank-card-clearing license to the US firm Mastercard. China also unilaterally introduced visa-free entry for six countries – including France, Germany, and Italy – last month.
Nobody expected China to sustain double-digit growth forever. Capital accumulation was always going to slow, and the early dividend generated from structural drivers of growth were always going to weaken. Now, economic growth will require higher shares of spending on household consumption, rather than on investment.
That is why China’s government is expected urgently to reduce the share of investment in GDP and support household consumption, such as through income transfers and stronger welfare programs (which would enable households to reduce precautionary savings). This will create a prosperous domestic market, encourage the expansion of the service industry, and support the shift to sustainable growth.
China’s economy has not exhausted its development potential, nor has it matured to the point that it has lost its vitality. While the economy’s current status has made rebalancing possible, it also opens a time window for China’s leadership to commit to carrying out structural reform. Certainly, growth has been slowing down and the global context has changed, creating a sense of urgency. But this is likely to work in the country’s favor, accelerating the structural reforms that its emerging growth model needs.
Zhang Jun is Dean of the School of Economics at Fudan University, is Director of the China Center for Economic Studies, a Shanghai-based think tank.
Copyright: Project Syndicate, 2024.
www.project-syndicate.org
Chinese grace: Members of the Chinese delegation perform an aesthetic dance at the 3rd Qemam International Festival for Mountain Performance Arts in Saudi Arabia. The festival presents cultures and traditions from mountain regions. In addition to 20 local groups, 25 foreign delegations are also taking part.
This Tuesday could prove uncomfortable for China’s leadership. The Human Rights Council’s country review will be held at the League of Nations Palace in Geneva. This time, particular focus will be on Tibet. Marcel Grzanna predicts that Beijing will probably have to expect unpleasant questions: The sinicization of Tibetans has reached a new dimension in the past five years. Resettlement programs and a boarding school system, into which almost one million children are forced, divide families and uproot the next generation.
And the German government should no longer turn a blind eye to it either. In a personal letter to German Foreign Minister Annalena Baerbock, the human rights spokesperson for the Christian Democrats in the Bundestag, Michael Brand, appealed for the German delegation to address “this gigantic violation of the rights of children and young people and their families” during the debate.
Meanwhile, the European Union has come up with a novelty. On Wednesday, the EU will combine security and trade issues in one strategy for the first time and present a package for the EU’s economic security. Even if the People’s Republic is only mentioned once, the goal is clear: Brussels wants to better protect Europe’s technologies from China.
Amelie Richter and Till Hoppe from Europe.Table have taken a look at the draft and identified its key points. Among other things, foreign investments are to be better screened for risks to security and order, the transfer of sensitive expertise by European foreign investments is to be prevented, and research security improved.
What the Chinese government would rather keep quiet about will be discussed today at the League of Nations Palace in Geneva. As part of the Universal Periodic Review (UPR), the periodic country review of the Human Rights Council, China must regularly explain the devastating reports coming out of the country. Tibet will receive special attention this time.
The sinicization of the Tibetan people has reached a new dimension since the last UPR around five years ago. Resettlement programs and a boarding school system, into which almost one million children are forced, divide families and uproot the next generation. Chinese security forces and the judiciary severely punish even the slightest suspicion of political dissent. Human rights organizations deplore the systematic eradication of Tibetan culture and language.
Ten UN member states have submitted dozens of questions in advance of the proceedings that explicitly concern the situation of the Tibetan minority. Even Germany increasingly peeks its head out when it comes to confronting China and demands detailed information. What percentage of Tibetan children are part of the boarding school system? Do the families have a choice? What happens if families refuse? Germany will also be putting the fate of nine imprisoned Tibetan activists on the agenda by name.
“In these changing times, it is not secondary to specifically name issues such as Tibet, forced boarding schools and the growing phenomenon of transnational repression in such a state review procedure,” says Michael Brand, human rights spokesperson for the CDU/CSU parliamentary group in the German Bundestag. In a letter available to Table.Media, the MP explicitly appealed to Foreign Minister Annalena Baerbock last week to instruct the German delegation to specifically address “this gigantic violation of the rights of children and young people and their families” during the review.
Kai Mueller, Executive Director of the International Campaign for Tibet (ICT) in Germany, called it an encouraging sign. “Tibet is receiving more attention. The countries are taking the situation seriously.” Indeed, China will have to face significantly more questions about Tibet than during the 2018 review process. Beijing will also have to answer questions about forced labor in Xinjiang, Hong Kong, labor law and education.
In mid-December, the European Parliament issued a motion for a resolution calling on the member states of the European Union to look into this systematic assimilation and to raise it specifically with the international community and China. However, nobody expects the People’s Republic to make any serious concessions. Five years ago, China rejected practically every substantial recommendation from UN members.
And yet a lot is at stake in the League of Nations Palace. Every question that China has to answer and every recommendation that is made reflects on the rest of the world’s assessment of the human rights situation in China. It is not so much the Chinese statements that sharpen the perception of the situation in the country as the critical questions raised by the member states. “China’s actions must not become the norm. The international community must uphold the principles of order,” Mueller demands.
This includes maintaining the influence of civil society forces on the UN Human Rights Council. For years, China has been trying to delegitimize international civil society. A few days ago, the newspaper The Geneve Observer reported that Chinese diplomats had asked the United Nations in Geneva not to grant “anti-Chinese separatists” access to Tuesday’s session. “Harassment activities inside Room XX are advised to be handled in a quiet, safe and swift manner so as to avoid disruptions to the review,” the statement said.
China also demands a “special security plan” for its 60-strong delegation. Beijing’s representative presented a list of nearly two dozen Uyghur, Tibetan and Hong Kong activists, which it described as being “of concern.” It called on UN officials to reject all requests from the activists and groups concerned to organize side events. This would also have affected the ICT, which held a briefing on Monday at which three Tibetans were given the opportunity to speak.
China apparently also conducted extensive lobbying in the run-up to the meeting. Reuters reported that China’s mission in Geneva had sent memos to envoys from other countries asking them to praise the country’s human rights record before the committee. Reuters referred to several diplomats and documents.
China also wants to gain control over the language and dispel doubts about the legitimacy of its rule over Tibet in the long term. Tibet should no longer be called Tibet, but Xizang – the name of Tibet in Mandarin. Michael Brand also explicitly pointed out this tactic in his letter to Minister Baerbock.
The specific use of relevant terms such as Tibet, forced boarding school system and transnational repression is “despite all the expected rejections” by the Chinese regime of great importance in order “not to surrender these issues to the repression mechanism that the PR China seems to have established with some success in numerous international bodies, including the UN Human Rights Council.” Brand explicitly asks Baerbock “not to refrain from using the word Tibet.”
The EU Commission will present its vision for economic risk minimization on Wednesday. The economic security package includes initiatives covering five areas. Brussels’ strategy aims to counter China and Russia’s growing readiness to exploit trade and critical supply chains for geopolitical purposes. The draft of the economic security package is available to Table.Media. Bloomberg and Politico had previously reported on the plans.
The publication of the package follows last June’s announcement of a strategy. At the time, however, only Competition Commissioner Margrethe Vestager openly said that Beijing was the focus of efforts. China is only mentioned by name once in the strategy documents. Vestager emphasized that it was a country-independent strategy – but with a “geopolitical filter.”
The package includes initiatives for:
The approach is based on three pillars: “promoting, protecting, partnering.” The strategy also identifies four priority risk categories, including risks in supply chains, physical and cyber security of critical infrastructures, technological security and the risk of instrumentalizing economic dependencies.
Many of the proposals are opinions and recommendations that may take a while to be translated into binding guidelines. How the EU member states adopt the initiatives also plays a role – as many of the points fall within the competence of the EU capitals. The composition of the next EU Commission and how it will pursue the project will also be a key factor. Changes to the draft are also still possible.
The draft states that the new strategy aims to “combat risks to the EU’s economic security.” At the same time, it aims to ensure “that the EU remains a highly attractive destination for business and investment.” The goal is to strengthen the EU’s and member states’ ability to address “ongoing risk assessments related to supply chains, technologies, infrastructure and economic coercion.”
The economic security strategy is generally a first for Brussels. The EU combines security and trade in one strategy for the first time.
A severe earthquake has shaken the border region between China and Kyrgyzstan. According to the US earthquake monitoring service USGS, the center of the 7.0-magnitude quake was in the province of Xinjiang in northwest China. There was no initial word on possible casualties. However, the USGS warned that “significant damage” and fatalities were to be expected. The earthquake occurred shortly after 2 a.m. on Tuesday.
According to AFP news, local TV stations reported that the quake’s tremors could even be felt in the Indian capital, New Delhi, 1,400 kilometers away. The earthquake was also felt in the Kazakh capital, Astana.
Earthquakes repeatedly shake the People’s Republic, some of them devastating. In December, 148 people died in a severe earthquake in the Chinese province of Gansu. It was the most deadly earthquake in China since 2014, when more than 600 people died in the southwestern province of Yunnan. In 2008, a magnitude 7.9 quake in Sichuan province claimed the lives of more than 87,000 people. ari
As the Ministry of Defense in Taiwan announced on Monday, another six Chinese balloons have been spotted in its airspace or its immediate vicinity. China is currently deploying more of these balloons around Taiwan. Of the six balloons now spotted, one passed close to the southern city of Pingtung, the others north of the port city of Keelung, where an important naval base is located.
China has been operating a large balloon program since 2019. It is part of the renewal of the Air Force on behalf of Xi Jinping. Experts say the program is large enough to conduct intelligence operations in dozens of countries for several years with countless surveillance balloons.
In the current case, it is unclear whether the balloons have a military purpose. However, they appear to be part of a campaign against Taiwan to unsettle the inhabitants of the democratically governed island. China significantly stepped up its activities and threats around the presidential election a few weeks ago.
Four Chinese fighter jets and four naval vessels were also spotted around Taiwan on Sunday and early Monday morning, according to the ministry. In response, fighter aircraft, naval boats and land-based missile systems were activated. rad
The narrative that China’s economy is nearing its peak – or has already reached it – has taken hold in Western media. But if you read the doomsayers’ analyses carefully, you will find that many of the reasons they give for their bleak assessments are not new. On the contrary, they tend to highlight precisely the same challenges that economists and commentators have been harping on for at least a decade or longer. If China was not sputtering then, why should we believe it is now?
To be sure, the global context has changed. Perhaps most important, the prevailing narrative about China has turned largely negative, and the West is now far more hostile toward it than it was ten or even five years ago. With the United States working harder than ever to contain China, direct Chinese exports to the US have fallen.
Even so, the “decoupling” of the world’s two largest economies is probably overstated. A recent study by University of California San Diego economist Caroline Freund and her colleagues shows that the US and China are indeed reducing their engagement in some areas. For example, US import growth from China lagged well behind US import growth from other countries for products subject to US tariffs.
But the same study also found that US and Chinese supply chains remain deeply intertwined, especially for “strategic products.” Moreover, the countries from which US imports are growing are often deeply – and increasingly – embedded in Chinese supply chains. In fact, countries seeking to displace China in US supply chains have been increasing their own imports from China, especially in strategic industries.
At the same time, global firms appear to be pursuing a “China+1” strategy, investing in other countries in addition to – but not instead of – China. Chinese companies, for their part, have increased their foreign direct investment in recent years and deployed their own production chains far beyond China’s borders, especially to countries that can avoid punitive US tariffs. This trend is likely to persist, ensuring that Chinese capital continues to flow to the rest of the world.
The doomsayers would likely point out that China is also facing domestic challenges. Beyond unfavorable demographics, China is also grappling with issues like large debts, misallocation of capital, severe pollution, and a troubled property sector. But China’s government has been clearly aware of these problems – and committed to addressing them – for a decade.
China’s program of “supply-side structural reform,” for instance, took shape in 2015 and included tighter financial regulations and increased government supervision of – and intervention in – highly leveraged sectors with excess production capacity. While the program helped to prevent a debt or financial crisis, it also constrained growth in many highly leveraged industries, such as real estate. But the view that a sluggish property sector will trigger China’s economic collapse is overly dramatic.
Chinese policymakers understand that a transition is inevitable in the real estate sector and are committed to ensuring that it occurs smoothly. More broadly, the structural reforms that have already been implemented have boosted China’s economic resilience, and, despite US tariffs, Chinese exports have remained robust. Meanwhile, new sectors – from services to the digital economy and high-tech industries – have been growing fast.
All of this helps to explain why China achieved 6.6 percent three-year-average growth in 2017-19. While the COVID-19 pandemic slashed growth in 2020, the economy rebounded strongly in 2021, growing at a rate of 8.1 percent. And the growth rate in 2023 is most likely to be slightly over 5 percent; even a round of lockdowns in 2022 did not prevent growth.
This does not mean that China emerged from the pandemic unscathed. Three years of reduced opportunities to generate income limited Chinese consumers’ ability to fuel a rapid post-pandemic recovery. The government must now redouble its efforts to support domestic demand and job creation by pursuing more expansionary monetary and fiscal policies over the next two years.
Chinese policymakers must also work to accelerate the liberalization of some industries. For example, productive services where private and foreign capital is barred from entering must be freed of these restrictions as soon as possible. Fortunately, there are signs that the authorities are aware of this imperative: financial regulators just granted a bank-card-clearing license to the US firm Mastercard. China also unilaterally introduced visa-free entry for six countries – including France, Germany, and Italy – last month.
Nobody expected China to sustain double-digit growth forever. Capital accumulation was always going to slow, and the early dividend generated from structural drivers of growth were always going to weaken. Now, economic growth will require higher shares of spending on household consumption, rather than on investment.
That is why China’s government is expected urgently to reduce the share of investment in GDP and support household consumption, such as through income transfers and stronger welfare programs (which would enable households to reduce precautionary savings). This will create a prosperous domestic market, encourage the expansion of the service industry, and support the shift to sustainable growth.
China’s economy has not exhausted its development potential, nor has it matured to the point that it has lost its vitality. While the economy’s current status has made rebalancing possible, it also opens a time window for China’s leadership to commit to carrying out structural reform. Certainly, growth has been slowing down and the global context has changed, creating a sense of urgency. But this is likely to work in the country’s favor, accelerating the structural reforms that its emerging growth model needs.
Zhang Jun is Dean of the School of Economics at Fudan University, is Director of the China Center for Economic Studies, a Shanghai-based think tank.
Copyright: Project Syndicate, 2024.
www.project-syndicate.org
Chinese grace: Members of the Chinese delegation perform an aesthetic dance at the 3rd Qemam International Festival for Mountain Performance Arts in Saudi Arabia. The festival presents cultures and traditions from mountain regions. In addition to 20 local groups, 25 foreign delegations are also taking part.
