Now, that brighter future appears increasingly in question. After decades of spectacular growth, China’s economy is slowing down — and the country is facing serious economic and demographic challenges. Exports are flagging. Retail sales are lagging. The all-important property market appears to be a bubble in danger of collapsing. More than one-fifth of young people are officially unemployed and the real number is likely much higher. The country is awash in debt.
Major banks have now cut their forecasts for China’s gross domestic product growth for this year and next. Beijing has conceded it is unlikely to hit its own projected growth targets for this year.
Some of China’s problems are of its own making, the result of misguided policies inflicted by the country’s ruling Communist Party leaders. The demographic imbalance can be traced to the decades-long one-child policy, at times brutally enforced with involuntary abortions and forced sterilizations. Now, China’s population is declining for the first time in more than 60 years, and, faced with a shrinking future workforce, the government is coming up with an array of policy incentives, propaganda campaigns and gimmicks to try to persuade or coerce people to have more children. So far, those efforts have found little success.
India, a rowdy and robust democracy, has already passed China in population this year, and is also projected to outpace China in economic growth for 2023.
China’s strict “zero covid” policy was also a factor, cutting off the country from the world for most of three years during the pandemic. After a brief uptick this year when the controls were finally lifted, the economy has still not recovered to its pre-covid levels. International tourism, for example, is just a fraction of its 2019 level.
China’s leaders, enamored of state-run enterprises and paranoid of any rival power centers outside their direct control, also embarked on campaigns to rein in the freewheeling tech sector, the housing market and the lucrative private education and after-school tutoring sector, putting thousands of companies out of business.
Other problems in China are external, particularly the impact of the U.S. trade wars and sanctions hitting the technology and semiconductor sectors of the economy.
Now, rather than showcasing the supposed “superiority” of the Chinese system, the current economic downturn is underscoring the Communist leadership’s unwillingness or inability to respond to the country’s myriad, mounting crises. Outside economists and experts say the government should be introducing new stimulus measures, such as infrastructure building, to create jobs and also ease lending conditions for new home buyers. But, so far, the government in Beijing has seemed paralyzed with indecision.
It’s long been an old trope that authoritarian governments are more efficient, and produced better results for their people, than democracies. In the 1990s, this misguided belief was known as “Asian values” and became an article of faith among many adherents — until it was busted by the 1997 economic crisis. Mr. Xi revived it, and took the idea to a new level. Now, it looks to be busted again.
Western democracies, with their fragmentation, polarized politics and endless debate and delay have long been derided as inefficient and ill-suited for tackling big long-standing problems — and one need only to look at the endless debt and spending debates in the United States, or the initial fumbling response to the pandemic with the arguments over mask-wearing and lockdowns. In the United States as well as in Europe, frustration and disaffection with democracy and concern over growing inequalities has led to a rise of populism and an attraction among some to a supposedly superior authoritarian model.
But in the post-covid era, the Western democracies have emerged stronger and some of the authoritarian regimes are struggling.
The world’s other great authoritarian model, Russia under President Vladimir Putin, is floundering economically for very different reasons. After Mr. Putin’s illegal and disastrous invasion of Ukraine, the West came together to impose crippling sanctions. Now, the ruble has plunged to its lowest point in 17 months, inflation is rising and Russia’s once lucrative gas exports to Europe have plummeted. Defense spending is, for now, keeping Russia’s economy propped up.
China and Russia had been trying to lure countries of the Global South to their concept of a new world order, not dominated by Western institutions and the United States, showcasing alternative models to Western-style democracies. Now, the two authoritarian giants are flailing. Let’s hope the world is paying attention.
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