https://www.scmp.com/rss/327843/feed Zhang Lin is deputy director and chief macroeconomic researcher at the Far East Credit Rating research institute. With years of experience researching China's macroeconomic trends and policies, he has published numerous academic papers on China's macroeconomic performance, bond market development and health insurance system reform. en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com Zhang Lin Zhang Lin China’s Ministry of Finance recently established a new debt management department, unifying the management of government debt quotas, issuance and redemption. What appears to be a simple adjustment reflects a profound shift in China’s economic governance. To counter the impact of the 2008 subprime mortgage crisis, China launched a 4 trillion yuan (US$563 billion) stimulus plan, shifting its growth model from exports to investment. From 2009 to 2014, growth was mainly driven by infrastructure... https://www.scmp.com/opinion/china-opinion/article/3332425/obscure-new-department-heralds-shift-chinas-debt-cycle?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3332425/obscure-new-department-heralds-shift-chinas-debt-cycle?utm_source=rss_feed Sun, 16 Nov 2025 08:30:11 +0000 Zhang Lin Zhang Lin History is often shaped by coincidences. During the past four decades, China has emerged as one of the world’s most successful economies and also one of the luckiest. Just as tensions with the United States and other Western powers escalated, unexpected black swan events repeatedly intervened, helping China navigate diplomatic and economic difficulties. These pivotal moments of fortune have occurred at least four times in recent history. The first occurred around 1990, when China was confronting... https://www.scmp.com/opinion/china-opinion/article/3328136/4-times-fortune-has-favoured-chinas-economic-rise?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3328136/4-times-fortune-has-favoured-chinas-economic-rise?utm_source=rss_feed Thu, 09 Oct 2025 12:30:08 +0000 Zhang Lin Zhang Lin The main challenge facing China’s economy is not a deflationary spiral but a low-price trap. This might sound unusual since low prices are typically a key feature of deflation. Classic deflation often starts with wealth evaporation and credit contraction, which leads to collapsing demand. Households stop consuming, firms halt investment, consumer and producer prices drop. This process slows economic activity, amplifies debt burdens amid falling asset values and crushes both money supply and... https://www.scmp.com/opinion/china-opinion/article/3323663/how-anti-involution-campaign-can-help-china-escape-low-price-trap?utm_source=rss_feed https://www.scmp.com/opinion/china-opinion/article/3323663/how-anti-involution-campaign-can-help-china-escape-low-price-trap?utm_source=rss_feed Sun, 31 Aug 2025 22:30:07 +0000 When the coronavirus pandemic began rippling through the global economy last year, China and the United States responded with very different fiscal and monetary strategies. China’s top leaders rejected the Ministry of Finance’s idea of monetising the fiscal deficit and exercised restraint in stimulus policies. The growth rate of money supply stopped rising in April last year when the pandemic was largely under control in China, allowing government bond yields to increase. Stimulus has been... https://www.scmp.com/economy/china-economy/article/3126582/coronavirus-stimulus-us-or-chinese-approach-more-dangerous?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3126582/coronavirus-stimulus-us-or-chinese-approach-more-dangerous?utm_source=rss_feed Tue, 23 Mar 2021 17:00:10 +0000 China has been particularly lucky in the 21st century. When George W. Bush tried to focus on Beijing as a competitor, the events of September 11 changed his course; China joined the World Trade Organization three months later and achieved 10 years of rapid growth. When Barack Obama was planning his “pivot” to the Asia-Pacific, the subprime mortgage crisis hit, and the ratio between China’s gross domestic product and that of the United States increased from 25 per cent in 2007 to 35 per cent in... https://www.scmp.com/economy/global-economy/article/3120242/coronavirus-pandemic-has-made-us-more-dependent-china-and?utm_source=rss_feed https://www.scmp.com/economy/global-economy/article/3120242/coronavirus-pandemic-has-made-us-more-dependent-china-and?utm_source=rss_feed Tue, 02 Feb 2021 12:15:08 +0000 Beijing’s decision not to set an annual GDP target for 2020 – for the first time since 2002 – is a sign it is putting stability ahead of growth as part of its preparations for an escalating conflict with the United States. Economic development has always been the central theme for Beijing since it established diplomatic relations with the US in 1979. But this year it has given priority to job creation and tackling poverty. The coronavirus outbreak might appear to have been the reason for the... https://www.scmp.com/economy/china-economy/article/3086867/beijing-preparing-decouple-us?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3086867/beijing-preparing-decouple-us?utm_source=rss_feed Sun, 31 May 2020 10:00:09 +0000 The outbreak of the novel coronavirus, which has killed over 1,000 people and infected over 40,000, has exposed fundamental flaws in China’s governance system and its growth model – the excessive concentration of power, information and resources in the hands of a powerful state. But given the path of China's political and economic evolution, it is difficult for China to loosen its grip on power as a response to so-called black swan events such as the coronavirus. The most likely outcome is that... https://www.scmp.com/economy/china-economy/article/3049956/coronavirus-exposes-fundamental-flaws-chinas-economic-growth?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3049956/coronavirus-exposes-fundamental-flaws-chinas-economic-growth?utm_source=rss_feed Tue, 11 Feb 2020 03:35:55 +0000 Beijing’s plan to make Shenzhen a socialist model city – a blueprint unveiled at a time of turmoil in the neighbouring city of Hong Kong – could be viewed as a plot to diminish the strategic importance of the former British colony. By that logic, a successful Shenzhen could put pressure on Hong Kong and serve as a reminder to the city that it must align its interests with the motherland if it wants to prosper. But that view neglects the true reasons underlying the rise of Shenzhen over the past... https://www.scmp.com/economy/article/3026227/china-trying-replace-hong-kong-shenzhen?utm_source=rss_feed https://www.scmp.com/economy/article/3026227/china-trying-replace-hong-kong-shenzhen?utm_source=rss_feed Sun, 08 Sep 2019 07:40:32 +0000 At the turn of the century, many people foresaw a “westernisation” process taking place in China – the development of a market economy and a freer society – especially after China joined the World Trade Organisation in 2001 with a clear commitment to reform its state-owned enterprises. The number of Chinese students studying in the US and European schools soared, offering fresh hope that returnees with an overseas educational background would facilitate China’s transformation into a society that... https://www.scmp.com/economy/china-economy/article/3019334/why-are-more-chinas-students-returning-overseas-big-fans?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/3019334/why-are-more-chinas-students-returning-overseas-big-fans?utm_source=rss_feed Sat, 20 Jul 2019 23:00:06 +0000 It is wrong to advocate confrontation, but it is not right to pretend there is peace either. In the current economic climate, China and the United States may reach a trade deal to avoid an escalation in the current tariff war, but such an agreement will not lead to harmonious coexistence between Beijing and Washington. Demands from Washington can be generalised into two main themes. One is asking China to open up its market further, and the other is asking China to reform its state-led economic... https://www.scmp.com/economy/china-economy/article/2186250/or-without-trade-war-deal-disputes-between-china-and-us-set?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/2186250/or-without-trade-war-deal-disputes-between-china-and-us-set?utm_source=rss_feed Sun, 17 Feb 2019 10:01:08 +0000 It’s fair to say China is facing a property market bubble in the sense that housing prices are far beyond people’s affordability. The price-to-income ratio in cities like Beijing and Shanghai is around 23, meaning the average household would have to work for more than two decades, without spending, to buy a home. In Tokyo and New York, that ratio is much lower at about 13. Some analysts are even predicting the Chinese economy will implode, including a collapse in housing prices, with or without... https://www.scmp.com/economy/china-economy/article/2181808/why-chinas-housing-market-bubble-wont-burst-any-time-soon?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/2181808/why-chinas-housing-market-bubble-wont-burst-any-time-soon?utm_source=rss_feed Sun, 13 Jan 2019 13:33:57 +0000 China’s large privately owned firms are becoming more like state-owned enterprises, as many in recent years have implanted in their businesses cells of the Communist Party, the Communism Youth League and even discipline inspection committees. The party’s organisation department found that 68 per cent of China’s non-state enterprises had set up party cells by the end of 2016, and that 70 per cent of foreign-funded firms in China had also done so. The ratio is even higher now given the party... https://www.scmp.com/economy/china-economy/article/2174811/chinese-communist-party-needs-curtail-its-presence-private?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/2174811/chinese-communist-party-needs-curtail-its-presence-private?utm_source=rss_feed Sun, 25 Nov 2018 06:30:15 +0000 The conflict between China and the United States is a competition between two different civilizations and value systems. While the trade imbalance between the two countries continues to make headlines, it actually means little to either. For China, the role of net export contribution to economic growth has been negative in most years since 2008. For the US, a trade deficit is inevitable when it consumes 30% of the world’s products but produces only 13%. Both Washington and Beijing must know... https://www.scmp.com/opinion/us-china-trade-war-really-clash-civilizations-and-ideologies/article/2168556?utm_source=rss_feed https://www.scmp.com/opinion/us-china-trade-war-really-clash-civilizations-and-ideologies/article/2168556?utm_source=rss_feed Mon, 15 Oct 2018 11:00:00 +0000 The conflict between China and the United States is a competition between two different civilisations and value systems. While the trade imbalance between the two countries continues to make headlines, it actually means little to either. For China, the role of net export contribution to economic growth has been negative in most years since 2008. For the US, a trade deficit is inevitable when it consumes 30 per cent of the world’s products but produces only 13 per cent. Both Washington and... https://www.scmp.com/economy/china-economy/article/2168492/us-china-trade-war-really-clash-civilisations-and-ideologies?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/2168492/us-china-trade-war-really-clash-civilisations-and-ideologies?utm_source=rss_feed Sun, 14 Oct 2018 16:30:00 +0000 It is inevitable that a trade war between China and the US will escalate into a new cold war, and the confrontation will press Beijing and Washington to form their own alliances and divide the world into their spheres of influence – a deja vu of the old cold war days when the US and the former Soviet Union vied for global dominance. The US is using tariffs as a tool to pressure Beijing to alter its state-led economic model and “unfair” trade practices. At the heart of US policy is the issue of... https://www.scmp.com/economy/china-economy/article/2165572/economic-cold-war-between-china-and-us-inevitable?utm_source=rss_feed https://www.scmp.com/economy/china-economy/article/2165572/economic-cold-war-between-china-and-us-inevitable?utm_source=rss_feed Mon, 24 Sep 2018 23:00:00 +0000 US President Donald Trump’s trade war has little chance of reversing China’s economic and political model. But it could stimulate China’s hardliners to reinforce state controls and social constraints. As a result, China’s nascent middle class will bear the brunt. If the trade war is a competition about which side can withstand more misery, China holds at least one crucial advantage. As its propaganda puts it, China can outlast the US in a trade war because its people “are willing to bear losses... https://www.scmp.com/news/china/china-economy/article/2163165/why-beijing-will-sacrifice-its-middle-class-trade-war?utm_source=rss_feed https://www.scmp.com/news/china/china-economy/article/2163165/why-beijing-will-sacrifice-its-middle-class-trade-war?utm_source=rss_feed Sun, 09 Sep 2018 22:45:21 +0000 With Beijing and Washington continuing to face off over trade, is China likely to sell off its US Treasuries to hurt America? The simple answer is no. A trade war is essentially a competition about who will be more miserable. If China – America’s largest foreign creditor – sells off its US Treasuries, it will bring down their price and raise their yields. So in theory, China’s holdings of US government debt are a powerful weapon in the trade war. In reality, the creditor is always in a weaker... https://www.scmp.com/news/china/economy/article/2160270/why-trade-war-wont-prompt-beijing-dump-its-us-treasuries?utm_source=rss_feed https://www.scmp.com/news/china/economy/article/2160270/why-trade-war-wont-prompt-beijing-dump-its-us-treasuries?utm_source=rss_feed Sat, 18 Aug 2018 02:01:09 +0000 Mixed ownership is Beijing’s latest catchword in its reform of the state sector. Last month Chinese Vice-Premier Liu He became head of the State-owned Enterprises Reform Leading Group, a move that may speed up the process. However, mixed ownership reform may also lead to corruption, insider control and unfair competition. Mixed ownership allows private investors to hold stakes in state companies and state funds to take stakes in private firms. Before 2013, reforms were only one way, with private... https://www.scmp.com/news/china/economy/article/2158036/three-dangers-chinas-mixed-ownership-reform?utm_source=rss_feed https://www.scmp.com/news/china/economy/article/2158036/three-dangers-chinas-mixed-ownership-reform?utm_source=rss_feed Tue, 07 Aug 2018 03:45:00 +0000 Beijing has made two mistakes in the trade war with Washington, for which China will pay a heavy price. The first is that the Chinese leadership misjudged US President Donald Trump. Beijing wrongly thought that Trump was just a businessman, regarding his trade war threats as bluffing ahead of the midterm elections. But in fact, Washington had already made clear in its National Defence Strategy report – released months before the dispute escalated – that the US would no longer tolerate Beijing’s... https://www.scmp.com/news/china/economy/article/2157348/chinas-two-big-mistakes-trade-war-may-lead-country-middle-income?utm_source=rss_feed https://www.scmp.com/news/china/economy/article/2157348/chinas-two-big-mistakes-trade-war-may-lead-country-middle-income?utm_source=rss_feed Mon, 30 Jul 2018 03:00:15 +0000 China’s total debt has reached 261 per cent of its GDP, financial risk is accumulating and the government is trying to tighten the credit supply to reduce borrowers’ exposure. Almost all the macroeconomic indicators, including infrastructure investment, industrial output and retail sales, weakened in recent months, painting the gloomiest picture of Chinese growth since 1989. The deleveraging campaign, focusing on financial institutions, has contributed to a sharp slowdown in real GDP growth. At... https://www.scmp.com/news/china/economy/article/2154234/why-china-must-curb-state-spending-well-lending-tackle-its-debt?utm_source=rss_feed https://www.scmp.com/news/china/economy/article/2154234/why-china-must-curb-state-spending-well-lending-tackle-its-debt?utm_source=rss_feed Sun, 08 Jul 2018 11:03:10 +0000