Derek Scissors
The time of outperforming Chinese growth is coming to an end. There will be a temporary growth surge whenever the global economy can put COVID-19 in the rearview mirror and, of course, the Communist Party can announce whatever it pleases whenever it pleases. But advocates for Chinese economic policies have lost the long-standing debate over whether the country will get old before it gets rich.1 The most likely answer for when the People’s Republic of China (PRC) will be truly rich is “not while any of us are alive.”
There are two reasons. The first has to do with reality: The PRC faces an unprecedented aging challenge that will sharply intensify late this decade, has serious debt problems, and prefers wealth-killing approaches to innovation and rural land. This has been clear for some time.2 The second is more recent and regards the central government’s version of reality. It has been willing to report progressively (and remarkably steadily) slowing growth while insisting plenty of jobs are being created, so slowing growth seems harmless.3 There have also been a series of slogans, given credibility by the recently published numbers, deemphasizing growth in favor of other objectives.
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