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China's Big Picture

Over the past three decades, China's economy has grown massively and consistently, because its policymakers have proven capable of managing a wide variety of global and domestic challenges. But the government is increasingly becoming the source of headwinds, and the country's outlook is growing cloudier.

LONDON – China has puzzled me for quite some time now, not least because some of its biggest current challenges appear to be self-induced. I have been fascinated with the Chinese economy since I first visited the country in 1990. It was soon after the Tiananmen Square massacre, and I was there only briefly; but I remember seeing thousands of people on bikes in Beijing, despite it being wintertime.

Since my stay coincided with a public holiday, I had the opportunity to visit the Badaling section of the Great Wall (which didn’t have such a smooth access road in those days). I wondered why there were so many tall modern buildings intermittently sited along the roadside. Like many other analysts over the past 31 years, I suspected that a property-market collapse might be in the offing.

But my clearest memory is of thinking that I had mistaken Beijing with Taipei, the capital of Taiwan, which I had also visited, logging the trip on a separate page of my passport to conceal it from the Chinese authorities, who had outlawed travel to the island in those days. The street markets seemed quite normal, scarcely different from what I was familiar with back home. Likewise, the street life seemed more Western (for lack of a better term) than I had expected – even more so than the vibe I had picked up on that first trip to Taipei.

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