US-China trade war inactivity could lead to the ‘worst recession in recent Chinese history’, says scholar
- Political economy professor Minxin Pei says Beijing lacks the will to make radical political changes to deal with the trade war with the United States
- Also says China’s strong control of the economy will eventually backfire, with economy slowing to its lowest growth point for almost 30 years
China’s inability to “take the opportunity to do the right thing” during the trade war with the United States could cost the country dearly in form of a recession that “will become the worst in recent Chinese history”, according to a leading political economy scholar.
Minxin Pei, a professor of government at Claremont McKenna College and a non-resident senior fellow at the German Marshall Fund of the United States, believes China’s strong control of the economy will eventually backfire.
“So far, it shows that China is not taking the opportunity to do the right thing,” said Pei. “China is willing to make some concessions by buying more goods, perhaps also improve intellectual property protection, but that does not improve China’s economy structurally.
“It is natural for economy to go through a boom or bust cycle … China has been trying to avoid this cycle so it has built a lot of distortion. There is no free lunch. Some day, some people will have to pay. History shows that the bust will come – the longer you delay, the bigger the cost it will be. The next recession will become the worst in recent Chinese history.”
There is no free lunch. Some day, some people will have to pay. History shows that the bust will come – the longer you delay, the bigger the cost it will be. The next recession will become the worst in recent Chinese history.
Pei, the author of China’s Crony Capitalism: The Dynamics of Regime Decay, believes China is unable to seriously loosen its grip on economy or curtail the state sector because it is not prepared to make political changes.