China’s ying and yang battle as Beijing faces tough economic choices

China wants its economic growth to decelerate and it wants to cut carbon emissions, but the slowdown cannot be too fast and coal must remain affordable

These seemingly contracting goals present a problem for Beijing as it treads the fine line between suffering short-term pain to ensure its long-term success

2-MIN READ2-MIN

China’s economy grew by 4.9 per cent in the third quarter of 2021 compared with a year earlier, down from the 7.9 per cent growth seen in the second quarter. Photo: Reuters

Zhou Xin

Zhou Xin is Tech Editor of the Post, following stints as Political Economy Editor and Deputy China Editor.

Published: 5:15pm, 25 Oct 2021Updated: 11:31am, 26 Oct 2021

China’s economic policies are seemingly filled with contrasting goals, pairs of targets where Beijing sets out how it wants to do one thing and also another thing too.

It wants its economic growth to decelerate, but the slowdown cannot be too fast; it wants to cut carbon emissions, but coal must remain affordable; and it wants to deflate property prices, but the crash cannot be too severe as to hurt local government coffers.

Some reflect China’s pursuit of long-term goals and the need to balance immediate challenges. The most obvious is the push to achieve carbon neutrality by 2060 needing to be countered by efforts to boost coal output and stabilise prices amid the ongoing power crunch.

Others reflect structural issues within China’s political economy system. For the central government, property market debt is a problem too big to ignore, but for a local authority, the real concern is generating steady revenues from selling land.

There are doubts over whether China can really having its cake and eat it, with some critics arguing that Beijing is merely kicking the can down the road

For certain contradicting goals, Beijing has proven to be an expert in finding a middle ground. It has been fighting the so-called impossible trinity in monetary policy theory for nearly two decades.