My Take | What the bear case for China’s economy says about its global ambitions
- Contrary to what foreign pundits and politicians believe, Beijing is too preoccupied with its domestic economy and politics to plot world domination at this time
If a week is a long time in politics, a year is an eternity in economics. Just this time last year, China was celebrating proudly for being the first major economy to stage a strong recovery. Today, everyone is down. And it’s not just the perennial bears, but some perennial bulls as well. That’s what makes it so scary.
Here’s just a random selection I read in the past two weeks: Stephen Roach, Shan Weijian, Joerg Wuttke and Michael Pettis. Their economic and investment views are fascinating, but perhaps their political implications are equally relevant.
Stephen Roach
A man with good access to people in high places in China, Roach told his interviewer on supchina.com that he might now be cut off because of his new views on the country’s economy and international politics.
Currently a senior fellow at Yale University’s Jackson Institute for Global Affairs and a senior lecturer at the Yale School of Management, he was the chairman of Morgan Stanley Asia and its chief economist. He pointed out that China contributed to global recovery after the last global financial crisis (GFC), but now, it may be contributing to a new crisis on the horizon.
“The world without China, in the post-GFC period, would’ve been a world that was flirting with a possibility of lapsing back into global recession,” he said. “The resilience of China, or the China cushion as I called it … was the only thing that stood between a weak post-GFC recovery and a relapse back into global recession during that earlier period.
“Fast forward to today, the cushion has no air in it. I mean, China’s growing at well below the post-GFC pace, if it’s growing at all and you show me another source of resilience.”