China’s Economic Identity Crisis
This year's China Development Forum highlighted the authorities' new emphasis on supply-side reforms. The problem is that this approach could overwhelm the shift to a consumer-led growth model that the country desperately needs.
BEIJING – Unlike the West, where former US President George H.W. Bush once mockingly referred to “the vision thing,” China takes economic strategy very seriously. That much was clear at the recent China Development Forum (CDF) in Beijing, an important gathering held each year since 2000, immediately after the conclusion of the annual National People’s Congress.
Originally conceived by former Premier Zhu Rongji – one of modern China’s most strategy-minded reformers – the CDF quickly became a high-level platform for engagement between senior Chinese policymakers and an international lineup of academics, foreign officials, and business leaders. It is, in essence, an intellectual stress test – forcing Chinese leaders to defend newly formulated strategies and policies before a tough and seasoned audience of outside experts.
It’s not always easy to distill a singular message from an event like this, especially as the CDF, once a small intimate gathering, has morphed into a Davos-like extravaganza of some 50 sessions spread out over three days. But, having attended 16 of the 17 meetings (I missed the first one), my sense is that CDF 2016 was especially rich in its strategic implications for China’s daunting economic challenges. And, as I saw it, the elephant in the room was the core identity of China’s economic model – a producer-led versus a consumer-led model.