Bear in a China Shop

Against a swelling chorus of bearism, Arthur Kroeber argues that China is likely to continue its economic ascent. But, he writes, although “China will likely surpass the United States as the world’s top economy … until it solves its fairness problem, it will remain a second-rate society.” From Foreign Policy: No question, China has many problems. Years of one-sided investment-driven growth have created obvious excesses and overcapacity. A weaker global economy since the 2008 financial crisis and rapidly rising labor cost at home have slowed China’s vaunted export machine. Meanwhile, a massive housing bubble is slowly deflating, and the latest economic data is discouraging. Real growth in GDP slowed to an annualized rate of less than 7 percent in the first quarter of 2012, and April saw a sharp slowdown in industrial output, electricity production, bank lending, and property transactions. Is China’s legendary economy in serious trouble? Not just yet. The odds are that China will navigate these shoals and continue to grow at a fairly rapid pace of around 7 percent a year for the remainder of the decade, overtaking the United States to become the world’s biggest economy around 2020. That’s a lot slower than the historical average of 10 percent, but still solid. Considerably less certain, however, is whether China’s secretive and corrupt Communist Party can make this growth equitable, inclusive, and fair. Rather than economic collapse, it’s far more likely that a decade from now China will have a strong economy but a deeply flawed and unstable society. See also Tom Orlik’s guide to battling China bears at China Real Time Report, via CDT. ...
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2 Responses to Bear in a China Shop

  1. hanabi says:

    While I’m personally of the opinion that no one can in honesty deny China’s social problems, Mr. Kroeber should nevertheless choose his words more carefully. Is he implying, with the sentence “[China] will “remain” a “second-rate society,”” that the object of comparion, the US, is a “first-rate society”?

    Mr. Krober is entitled to his beliefs, but an objective journalist should exercise more thought with his or her vocabulary.

    I’m slightly disappointed that CDT chose to add this one to the archive; it fails as a piece of objective journalism and falls instead under the too rampant US-clout-stroking category. I hadn’t realized this was what CDT was geared towards.