Reports of the death of the Chinese economy may be greatly exaggerated say analysts
Here we go again, said Xin Ping on Xinhuanet (Beijing). China recently released economic data indicating that its post-Covid recovery has been slightly weaker than hoped in 2023 – so, as ever, foreign commentators are now bleating about China’s “sluggish” economy and predicting its imminent collapse.
- SEE MORE What’s causing China’s deflation crisis?
- SEE MORE Where is China’s missing foreign minister Qin Gang?
- SEE MORE China’s ‘breathtaking’ infiltration of UK economy: an existential threat?
You only have to look at a few facts and figures to see how absurd such talk is. Yes, the rebound in April and May was less than expected, but China’s economy is still performing strongly. In May, total retail sales of consumer goods grew by 12.7% year on year, and catering revenue shot up by 35.1%. From January to May, output of renewable energy vehicles and solar cells rose by 37% and 53.6% respectively. The IMF predicts that China will achieve its growth target of 5.2% this year and contribute about one-third of global growth. Sluggish? Hardly.
‘Middle class bearing the brunt’
The Chinese economy is indeed still growing and generating millions of jobs, said Sun Yu in the FT (London). The overall unemployment rate is stable at 5.2%. The problem is that most of these jobs are “in low-end work unattractive to university graduates”. China has an increasingly educated workforce, but the tepid recovery – and the regulatory crackdowns of recent years on the technology and finance sectors – mean there aren’t enough good jobs to go round.
In May, more than a fifth of 16- to 24-year-olds were unemployed. China’s middle class is “bearing the brunt of the nation’s economic changes”, agreed Zhou Xin in The South China Morning Post (Hong Kong). With fewer high-paying private-sector jobs available, it has become “very easy for an existing middle-income household to get kicked out of the club, and very hard for a poor household to join in”.
‘Opportunity knocks for US’
Whether it’s down to a lack of opportunities or dislike of authoritarian rule, a growing number of people are leaving China, said Catherine Rampell in The Washington Post. There was a net outflow of more than 300,000 in 2022, more than double the annual level from 2010-2017; among them are many millionaires and entrepreneurs. The US should be trying to tap this talent, but it’s doing the opposite.
Senators are pushing to deny visas to Chinese citizens who want to study science in the US, citing security risks. Florida recently passed a law banning Chinese nationals from buying property; other states are set to follow suit. This is misguided. The US is a nation of immigrants that has benefitted from poaching “the top talent” of its geopolitical rivals. It’s missing a big opportunity.
