The world has little use of aggressive nationalist dreams nor materialist aspirations like the American dream of upward mobility. China has held tianxia datong as the highest ideal since ancient times, and it’s time for the original Chinese dream to return home.
The emergence of Omicron has rendered its ‘zero Covid’ strategy uneconomical and unsustainable, and China must reopen its struggling economy. This means preparing its healthcare system for a surge in cases, and easing its monetary policy to boost confidence and consumption.
With exports flagging and US techno-nationalism on the rise, China’s economic predicament is being compared to that of 1990s Japan and the resulting stagnation. But unlike Japan, China still has plenty of room to grow effective investments and boost household consumption under its internal circulation strategy.
China, with its low inflation, can continue to boost its economy and stimulate demand, which will shore up the global decline. It just needs to keep its monetary policy prudent and look out for the yuan becoming too strong.
China is ready to become an advanced economy, but with growth set to slow to 3.8 per cent by 2030, reforms are still needed to improve capital investment, smooth out the stock market and better allocate talent.
The current model of globalisation may have accelerated economic growth, but it has not benefited many people in lower-income countries and is not eco-friendly. Greater connectedness within the Global South, more dynamically adjusted world currencies, and higher relative prices of physical products could help.
There are concerns China could undergo economic stagnation, like Japan has since the 1990s, because of an asset bubble bursting and the ageing population. But the country’s policy measures, and its vibrant entrepreneurial ecosystem and dynamic capital markets, tell a different story.
With a different approach, it might be almost impossible to keep the caseload from overwhelming China’s medical system. Case numbers are rising rapidly elsewhere, even in populations with high vaccination rates, and such a scenario would just be too costly for China.
China’s inclusive institutions motivate the ordinary individual to strive. But it must undertake housing and tax reform, and continue to learn from better practices in other economies, which include accelerating the reallocation of resources to the technology frontier.
The government has been gradually regaining respect as the coronavirus is brought under control in Hong Kong. At the same time, the city’s unique strengths – proximity to China, common law system, and top universities – mean it has a bright future as it continues to welcome global citizens.