China – The Bipolar View

Over breakfast last week, I heard Dr. Keyu Jin, Assistant Professor of Economics, London School of Economics, arguing against a belief in some quarters that China is slowing down and that the economy faces a hard landing. She emphasised that several sources of growth are yet untapped; for example, urbanisation is still low and will result in greater investment and consumption. Savings rate has been growing in China and declining in the USA. Demographics are unlikely to affect growth since productivity is 10 times the drop in labour pool.
Some of the problems she admitted were to do with wages having been kept low to subsidise exports. While the world worries about the social unrest in China, the government approval ratings have been 85%+, unlikely to be matched in any democratic nation. However, the biggest issue is the fear of breaking down of meritocracy when the aspiring young educated feel that upward mobility is not a possibility. That in her view is something the Party needs to address.
That same evening, I met Gerard Lemos whose book “The End of the Chinese Dream”, Yale University Press, challenges all that I had heard that morning at breakfast. Can a country elicit such opposing viewpoints?

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