China’s Not-So-New Not-So-Normal
During a recent speech, Chinese President Xi Jinping described what he calls the Chinese economy's “new normal" of slower growth, following three decades of double-digit expansion. But, though China is unlikely to continue on a path of double-digit growth, there is little about its economy that can be considered normal.
HONG KONG – I just spent a week in China, where I participated in the Boao Asia Forum, a conference similar to the annual gathering of the World Economic Forum in Davos. The topic of my panel was what President Xi Jinping has called the Chinese economy’s “new normal”: an era of relatively slower growth, following three decades of double-digit economic expansion.
But what strikes me most about China’s economy is how remarkable it is. Indeed, its performance continues to astound me. Though it undoubtedly faces plenty of challenges, the key question is how likely they are to bring down the economy.
Of the four BRIC countries – Brazil, Russia, India, and China – Xi’s is the only one that has met my expectations for growth so far this decade. From 2011 to 2014, the Chinese economy grew at an average annual rate of 8% per year. If it continues to grow by around 7% for the rest of the decade, as the authorities and many observers expect, it will achieve an average pace of expansion of 7.5%, in line with my projections.