are being expressed about the direction of the economy and the range of responses to it so far from President Xi Jinping and the party leadership.
The central question to emerge from these discussions is whether the Chinese economy is on the ropes and headed for collapse, or running into a difficult but orderly policy shift to stabilise its debt and economic management, while accepting the corollary that it willThe implications for great power competition and the global economy are profound, and raise important policy challenges for Australia.
now predicts China’s growth rate, which was 5.5 per cent in the first half of this year, will to slow to 3.5 per cent in 2030, 2.8 per cent in 2040 and close to 1 per cent in 2050. No wonder there is concern for the world’s second-largest economy. Little wonder that nostalgia is apparent, some wanting to summon Deng from the grave to “save China”.based around chip-making and AI as well as green growth: electric vehicles, batteries and solar and wind power.Electric vehicles in particular are likely to be a driver of future Chinese economic growth: China now boasts 100 companies that make them.
Witness the expanded BRICS, the new platforms for development aid and the thoughtful eye on gaining access to the Middle East petrodollars for investment.It is not that the Chinese economy is a stranger to setbacks or challenges: what’s different this time is that it is facing them on multiple fronts and simultaneously: in the non-bank financial sector, the collapsed property market, high rates of youth unemployment and rising levels of local government debt.
Interest rates on mortgages have been reduced and the purchase of a second property is now permitted in some big cities. The latter move is a relaxation of Xi’s own three red lines on housing, in which he had stipulated clearly that property was for living in, not for the purposes of investment or speculation., implementing measures short of the household stimulus that some are demanding. Xi has in the past warned of “welfarism”, or what some senior Chinese officials have called “laziness”.