Beijing chinese exports fell Fred Dufour/Getty Images

Long Reads

China’s Growth Odyssey

China’s steadily declining rate of economic growth is a problem for both China and the world economy. Now that US President Donald Trump is set to wreak havoc on global stability, can China still hope to achieve the widely shared prosperity it has long sought?

SHANGHAI – Will China’s sociopolitical stability and economic dynamism continue to hold? It’s a question China-watchers are asking more frequently now than at any time in the past three decades. This fall, the 19th Congress of the Communist Party of China will decide (or not) President Xi Jinping’s successor in 2022, while also replacing (maybe) five members of the seven-member Politburo Standing Committee. The result, one hopes, will not be a new period of turbulence like that which the election of Donald Trump has unleashed on the United States.

The potential for political uncertainty in China comes at a time when its economy’s health seems to be waning, and when Trump’s presidency could pose a direct challenge to its growth model. From 1979 to 2010, China’s GDP increased at an average annual rate of 10%, generally exceeding the government’s target (the exception being the 1989-1990 period, following the mass incident at Tiananmen Square). But then growth slowed to 7.9% in 2012 and 7.8% in 2013, leading the government to declare a “new normal.” When growth slowed further, to 7.3%, in 2014, and remained sluggish the following year, the government announced that the target growth rate for the next Five-Year Plan (2016-2020) would be 6.5-7%. Sure enough, the growth rate has continued to slide, to 6.9% in 2015 and 6.7% last year.

The steady deceleration of economic growth since 2010 has become an albatross around Chinese policymakers’ necks. Properly diagnosing the cause, and formulating the right policy response, will not be easy. But whether China succeeds will have far-reaching implications for the world economy, especially now that Trump is confirming worst-case scenarios regarding his administration’s impact on global stability and prosperity.

To continue reading, please subscribe to On Point.

To access On Point, log in or register now now and read two On Point articles for free. For unlimited access to the unrivaled analysis of On Point, subscribe now.

required

Log in

http://prosyn.org/0hpPvF5;
  1. Adam Michnik Gallo Images/Getty Images

    Europe’s New Eastern Question

    is interviewed by

    Insider Interview

    • With right-wing populists ascendant in Poland and Hungary, and gaining ground elsewhere in the European Union, politics in some parts of the West looks increasingly like politics in Russia.

    • Sławomir Sierakowski, Director of the Institute for Advanced Study in Warsaw interviews Adam Michnik, one of the intellectual architects of Solidarity and of the transition from communism in Central Europe, on Europe's illiberal turn.
  2. Trump visits China Thomas Peter-Pool/Getty Images

    China’s New World Order?

    • Now that Chinese President Xi Jinping has solidified his position as China’s most powerful leader since Mao Zedong, he will be able to pursue his vision of a China-led international order.

    • But if China wants to enjoy the benefits of regional or even global hegemony in the twenty-first century, it will have to prove itself ready to accept the responsibilities of leadership.
  3. Paul Manafort Alex Wong/Getty Images

    The Fall of the President’s Men

    • There can no longer be any doubt that Donald Trump is the ultimate target of Special Counsel Robert Mueller’s sweeping investigation of alleged Russian interference in the 2016 presidential election. 

    • But even if Mueller doesn’t catch Donald Trump in a crime, the president will leave much human and political wreckage behind.