The Intelligence Squared Economic Outlook China Special, with Keyu Jin
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China’s economic power has been growing for decades. The capitalist reforms of Deng Xiaoping quickly transformed China into the world’s fastest-growing major...

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China’s economic power has been growing for decades. The capitalist reforms of Deng Xiaoping quickly transformed China into the world’s fastest-growing major economy, with growth rates averaging 10% annually. But in recent years the so-called China miracle has begun to slow down. The Covid-19 pandemic and the default of property giant Evergrande (the world’s most indebted property developer) are among the factors that have economists and politicians around the world asking: Is China’s economy in big trouble?

As we enter 2024 President Xi Jinping faces some formidable challenges: slow growth, high youth unemployment and a domestic property market in turmoil.

In May 2024 renowned economist Keyu Jin came to Intelligence Squared to help us all make sense of the problems China faces. She explained how the success or failure of its economy will have profound consequences for the rest of the world.

Some argue that a more vulnerable China will seek better relations with the United States and the West. Others say economic weakness could make the country more aggressive and therefore more likely to invade Taiwan. Either way it has never been more important for us to understand the Chinese economy.

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Main Topic:

The economic outlook for China, its role in the global economy, and its future prospects, featuring Keyu Jin, Associate Professor of Economics at the London School of Economics.

Key Points:

  • Global Economic Landscape: While global uncertainty is rising, Asia, particularly India, China, and Indonesia, remains the fastest-growing region, contributing significantly to global growth and the middle-income group.
  • Shifting Globalization: US-China trade is declining, but trade and investment are increasing through third countries like Vietnam and Mexico, where Chinese factories are relocating. This increases trade costs.
  • Rising Protectionism: Protectionism threatens to reverse gains in global inequality reduction, disproportionately affecting developing countries.
  • Pro-Growth Agenda: There’s concern that countries are dropping the pro-growth agenda in favor of national security, domestic politics, and populism.
  • AI Supremacy: The US-China rivalry is primarily driven by technological competition, especially in AI. Restrictions on technology exports to China may accelerate China’s domestic technological development.
  • China’s Transformation: China has experienced remarkable growth and development, transforming from a relatively backward place to a global economic power.
  • Misconceptions about China: Many predictions of China’s economic collapse have been wrong. China’s unique model combines state mechanisms and markets, defying conventional wisdom.
  • Role of the State: The state played a crucial role in China’s economic jumpstart through coordination and decentralization, incentivizing local officials to promote economic growth.
  • China’s Economic Future: While concerned about China’s current economic situation (its first official recession), there’s optimism about its potential due to a large population still living under $300/month and a significant gap in service sector development compared to developed economies.
  • Demographics: Demographics are not the primary challenge for China; technology and automation can offset the impact of an aging population.
  • Generational Shift: A new generation in China, born in the 80s and 90s, is more open-minded, entrepreneurial, and focused on consumption, potentially changing the economic and political landscape.
  • Pro-Growth Agenda (Revisited): There’s a risk of veering away from the pro-growth agenda due to security concerns and geopolitics, but pragmatism is returning in response to recent economic challenges.
  • Social Equity: There’s a growing consciousness that economic efficiency may not be socially desirable, leading to policies aimed at reducing inequality and promoting social harmony.
  • Industrial Policies: The US is increasingly adopting industrial policies similar to China’s, leading to rising protectionism and an arms race in industrial policies.
  • Taiwan: While reunification with Taiwan is a long-term ambition, domestic challenges and the interconnectedness of the Chinese and Taiwanese economies suggest no immediate military action is expected.
  • Investment in China: Despite a period of uncertainty, there’s still potential upside for Chinese companies, and global capital may flow back if China stabilizes and encourages foreign investment.
  • Trade War: Tariffs imposed by the US are primarily paid for by Americans and are unlikely to significantly affect China.
  • China in Africa: China’s interest in Africa is both economic and strategic, involving infrastructure investment and geopolitical considerations.

Highlights:

  • China’s economic model is a unique blend of state control and market forces.
  • Technological competition is the core of US-China rivalry.
  • A new, consumer-driven generation is emerging in China.
  • Despite challenges, China still has significant economic potential.
  • The US is increasingly adopting industrial policies similar to China.

About Channel:

Intelligence Squared is the world’s premier forum for debate. Here you’ll find the best of our past events.

Intelligence Squared has established itself as the leading forum for live, agenda-setting debates, talks and discussions around the world.

Our aim is to promote a global conversation that enables people to make informed decisions about the issues that matter, in the company of the world’s greatest minds and orators.[1]

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