31 July 2024

Risk to resilience: China’s economic security strategy

Wenjing Wang

In 2014, at the inaugural meeting of the National Security Commission, China officially introduced the concept of “comprehensive national security,” framing economic security as its basis.

Safeguarding economic security, under this framework, entails improving China’s economic strength while controlling financial risks and fostering economic resilience. However, the unforeseen Covid-19 pandemic exposed China’s economic vulnerabilities, leading to a post-pandemic recovery more sluggish than many observers had anticipated.

With challenges from the external environment, theories such as “peak China” predict a pessimistic future for the Chinese economy and warn of a more aggressive Beijing if it loses its legitimacy rooted in decades of remarkable economic growth.

Domestically, China faces challenges on two fronts: demographic shift and financial risks concentrated in the property sector and local governments (LGs). The long-term effects of the one-child policy (1979-2015) and increasing life expectancy are straining China’s shrinking labor force and fragile social safety net.

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