Is China’s Economy declining?: Reviewing Daniel H. Rosen’s Argument in Foreign Affairs

Is China’s Economy declining?:  Reviewing Daniel H. Rosen’s Argument in Foreign Affairs
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Islam News – By Dr. Mohamad Zreik*|

According to Daniel H. Rosen’s article “Xi Is Running Out of Time: China’s Economy Heads for a Hard Landing,” (Foreign Affairs) China’s economy is on the verge of a “hard landing” and the Chinese Communist Party is in danger of losing its power.

Some people are worried that the Chinese Communist Party (CCP) has missed an opportunity to prevent a harsh landing because of its poor economic performance, and Rosen has pointed out some of the difficulties that Chinese investors face and that will have an impact on China’s economy.

The Chinese economy is no longer immune to the dangers of stepping off the market reform path, according to him, because China is now in a different time period and the economic policy of Chinese President, Xi Jinping, is in direct opposition to that of the previous Chinese approach, which led to an unstable economic reality.

Rosen acknowledges that China’s technological advancements have resulted in a widening divide between the rich and poor, but he believes that this renaissance has also generated a widening gap between the rich and poor. “Some individuals would need to get rich first,” cautioned Deng Xiaoping, the CCP leader who launched China’s “reform and openness” in the late 1970s. Rosen revisits that warning.

Since the state and the CPC were no longer able to exert as much control over the private sector as they had in the past, Chinese authorities intervened, declaring that going forward, for-profit education would be prohibited, initial public offerings (IPOs) abroad would require political approval, and foreign investment in many niches would be restricted.

These government economics have failed, and the CCP’s regulation of e-commerce, ridesharing, gambling, and many other areas slashed an estimated $1.5 trillion to $3 trillion from the total stock prices of enterprises, the writer claims. According to Rosen, the Chinese economy is on the verge of collapsing, putting China’s local governments at risk of defaulting. The failure of the “Evergrande Corporation” to repay its debts was used as a model.

According to him, this deteriorating economic position has sparked demonstrations and social tensions that have spread to other heavily leveraged corporations. When discussing China’s economic crisis, Rosen points to the September energy supply crisis as an example; “energy shortages cut industrial production, even in the thriving export industries, which are the main bright spot in the Chinese economy today, including manufacturers of smartphones and automobiles. Rolling blackouts hit even the most affluent areas in China, including Beijing, throughout September.”

Rosen made a connection between China’s current economic woes and its future as a global economic power. At this point in time, he said, central bankers and other officials outside of China are beginning to express worries about Beijing’s capacity to manage its financial position and any potential spill-over consequences. Rosen criticizes the Chinese Communist Party’s economic strategy when he comments “The CCP’s hard-won credibility on economic policy is being destroyed under this drumbeat of negative economic news.” According to Rosen, a major economic slowdown is now a near-term fear rather than a far-off one.

Data and numbers were employed to support the author’s argument; yet, this study is biased against China and the Chinese Communist Party in order to misrepresent the country’s leadership both domestically and internationally.

Because to Covid, all countries have seen economic decline, however China has shown the finest example by attaining positive development despite the epidemic. At a time the international economy has deteriorated sharply and medical teams worldwide have exhausted due to the outbreak of covid and the inability to put an end to it.

Even in the major democracies, there are instances of political turmoil, economic corruption, and financial deterioration that may be seen from a neutral vantage point. But the Chinese system has shown that it is built on the foundation of stringent supervision, and it is difficult to identify incidents of economic or administrative corruption in the country’s government and businesses. When China’s economic reform and opening-up policy was first implemented, it was referred to as the “Chinese miracle” because of the country’s rapid economic growth and development.

*A Lebanese researcher specialized in Chinese affairs.

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