The Chinese economy is slowing. That is something with which nearly every observer agrees. According to the official statistics, China is still growing at just over 6%. The consensus of economic observers has long been, however, that the Chinese inflate their reported growth rate. Right now, some say that the Chinese economy is growing at a rate something like 1% or that it may even be in recession. No one knows the real facts on this.
What does a slower Chinese economy mean?
1. For the last 30 plus years, China has been rapidly modernizing and raising the living standards of its people. At the same time, the Chinese have been denied many rights that Americans take for granted. There has been little effective protest about the government while it has produced the economic miracle. If that rapid growth ends, the Chinese people may change that. President Xi knows that, and he has to do what he can to keep the growth rate up.
2. On top of a normal economic slowdown, the Chinese are feeling the effect of the trade dispute with the USA. America is China's largest export market and exports are much more important to China than they are to the USA. For this reason, the Chinese really need to bring the trade disputes to an end quickly. It doesn't mean that they will crumble and accept whatever deal the USA proposes. It does mean, though, that it will be possible to make fair agreements with China. The Chinese need the deal more than we do.
3. China has been working for a long time to become the regional hegemon in east Asia. The basis for Chinese power is, ultimately, China's economy. If that weakens, Chinese power also weakens.
What does a slower Chinese economy mean?
1. For the last 30 plus years, China has been rapidly modernizing and raising the living standards of its people. At the same time, the Chinese have been denied many rights that Americans take for granted. There has been little effective protest about the government while it has produced the economic miracle. If that rapid growth ends, the Chinese people may change that. President Xi knows that, and he has to do what he can to keep the growth rate up.
2. On top of a normal economic slowdown, the Chinese are feeling the effect of the trade dispute with the USA. America is China's largest export market and exports are much more important to China than they are to the USA. For this reason, the Chinese really need to bring the trade disputes to an end quickly. It doesn't mean that they will crumble and accept whatever deal the USA proposes. It does mean, though, that it will be possible to make fair agreements with China. The Chinese need the deal more than we do.
3. China has been working for a long time to become the regional hegemon in east Asia. The basis for Chinese power is, ultimately, China's economy. If that weakens, Chinese power also weakens.
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