Chinese economy will continue to defy its ill-intentioned critics

Nicholas R. Lardy, senior fellow at the Peterson Institute for International Economics, published an article on the website of Foreign Affairs last week titled “China Is Still Rising-Don’t Underestimate the World’s Second-Biggest Economy”, arguing that the US academics’ recent view of China already peaking as an economic power underestimates the resilience of its economy.

Lardy said in the article that although China faces several headwinds, the country overcame even greater challenges when it started on the path of economic reform in the late 1970s. China’s economy is likely to expand at twice the rate of the United States in the years ahead. Although there are different views on the Chinese economy’s expected growth rate in the years to come, Lardy is not alone in his view.

It is natural that there are different views on the same economy. Yet it is notable that many of the proponents of the “China peaking” theory are also those that painstakingly peddled the “China collapse” theory before.

The Chinese economy has not collapsed as predicted by them, nor has it peaked as they claim now. More political than objective, they are always ready to see and exaggerate the downside.

For instance, be it the low birth rate and aging society or the real estate bubble and local debts, these are not problems exclusive to China. They are the type of challenges any economy will face after its socioeconomic development reaches a certain phase.

The reduction of foreign direct investment and the withdrawal of capital from the emerging market economies are global trends caused by the US Federal Reserve’s interest rate adjustment, which is a technical means of the US to reap the world’s recovery dividends. Rather than a sign of the “decline” of the Chinese economy, the reduction of foreign investment and capital reflect the inherent bias of the dollar-centered world financial system and its negative effects on the world economy.

The Chinese economy still has a solid foundation, strong connections with the world market, remarkable resilience and enormous potential.

The country’s relentless pursuit of high-quality development featuring innovation, sustainability, inclusiveness and fairness is the answer to the challenges. That it has taken the initiative to leave the comfort zone and bid farewell to the old high-speed growth model based on high inputs, low labor costs and heavy pollution, testifies to the nation’s resolve to press ahead with its modernization.

It is through effectively finding the solutions to problems that the Chinese economy has so impressively expanded in scale and improved in quality over the years. China welcomes and encourages all insightful and objective analyses on its economy. Chinese policymakers will not shy away from the problems.

Li Yang, China Daily