GOOD MORNING FROM LONDON
Today + tomorrow the column will focus on two assessments of China’s Economy and its significance for the future.
The two authors have credibility. The first is Thomas Orlick who was formerly a journalist based in Beijing but is now the Chief Economist for Bloomberg. He advises one of the most successful exponents of American Capitalism and his views on China have relevance.
Orlik starts by focusing on crises, excesses and mistakes that accompanied China’s Boom – including the Asian Financial Crisis of 1997, “ghost cities”, and stock market crashes. China, says Orlick, was a Big Bubble about to pop as bad debt and abandoned projects led the way.
It never happened. China met each challenge and as Orlick observes “ a ghost town became a thriving business hub; a runaway banking system was brought to heel, and zombie firms lurched back to life”. China stabilised its debt-to-GDP ratio; restrained shadow banking; + maintained steady growth.
Orlick provides 3 explanations; First, the underlying resilience of the economy + financial system. Second, “the underappreciated ingenuity of policymakers”. Third, the unusual resources of an authoritarian state.
More specifically Orlick notes the application of cloud computing, robotics, artificial intelligence and immense data/information. Looking ahead China’s post-2025 economy will use capital, labour + energy less intensively will be more environmentally sustainable and will remain a formidable competitor to the West.
The key conclusion is the strength of the Leninist one-party state. China, says Orlick, can “shift policy, decisively, comprehensively and without regard to procedural or legal niceties”. Finally, Orlick commends China’s government for solving problems creatively and seeking pragmatic “middle path” solutions.
Has China made such progress by persecuting its people and denying them civil liberties? The 730,000 people who died in the US/UK from Covid-19 had civil liberties.
Tomorrow China’s Global Challenge