Xi Jinping's Covid restrictions have stunted his country's progress
With the benefit of hindsight, we can be certain that futurologists are often wrong. Contrary to the expectations of earlier decades, no one is living on Mars, nor do many of us commute to work in a flying car.
However, there was one favourite prediction that did seem absolutely nailed-on. At some point, perhaps as soon as this decade or the next, China was set to overtake America to become the world’s biggest economy. The professional prognosticators didn’t have to stick their necks out very far; they just had to compare GDP growth rates and extrapolate a bit. After all, China had already overtaken all the other Western economies, so doing the same to America was surely just a matter of time. Hence, those breathless predictions of a ‘Chinese Century’.
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Except that the experts have been having second thoughts. The latest example is the Japan Center for Economic Research (JCER). As recently as last year, the Japanese think tank was predicting that the crossover point for the world’s two biggest economies would come in 2033, but now they’re not so sure. Indeed, a new JCER forecast — which extends to 2035 — shows no crossover point. America stays clearly ahead of China throughout this period.
According to a Nikkei Asia, a key reason for JCER’s change-of-mind is the increasingly obvious failure of China’s Zero Covid policy. Back in 2020 we were led to believe that, despite the pandemic’s point of origin, the Chinese authorities had everything under control, while Western governments — especially those of Britain and America — were floundering as the virus ripped through the population. In 2022, it all looks very different. The people of the West are getting on with their lives, while a poorly-vaccinated China braces itself for the collapse of Zero Covid.
Nor is this the only failure of Chinese government policy that’s become hard to ignore. Most obviously, there’s the enormous liability of the country’s over-inflated, debt-ridden property sector. Meanwhile, Western governments are belatedly realising that trade with China mustn’t be allowed to compromise our security. Hence the American ban on semiconductor exports to the country and British restrictions on Chinese involvement in new nuclear power stations.
Overall, Chinese exports are massively down — and though demand will probably recover, Beijing will find that the West is a much less naïve trading partner than it used to be.
Looking further ahead, the People’s Republic is also facing a demographic meltdown. It’s hard to maintain a rapidly growing economy with a shrinking working age population — just ask the Japanese. So if the Chinese economy doesn’t overtake America’s within the next few decades, the likelihood is that it never will.
But as much as we need to take a more sceptical attitude to claims of Chinese economic prowess, there are also some searching questions that need to be asked of the West. Above all, why we were so willing to fall for the hype over China?
Well, there is the very human tendency to fall down in fear before accumulations of worldly power. This is especially true of power in undiluted form — displayed without embarrassment and wielded without checks and balances. In other words, the sort of power that is still found in countries like China and Russia.
And yet both China and Russia now serve as object lessons in the downsides of over-mighty government. For all the loose talk about the rise of the authoritarian model and the decline of democracy, I still wouldn’t bet against the West.