China’s economy faces troubles, unlikely to overtake US by 2030
China’s economy is reportedly tottering, and it is unlikely to emerge the world’s biggest economy by 2030 as predicted. This is according to a report, which puts the blame at the doorsteps of the country’s leader Xi Jinping.
The report has that since Xi’s coming to power a decade ago, his policies have scaled back China’s economic progress.
“Xi’s leadership is not causal for China’s economic rise,” said Sonja Opper, a professor at Bocconi University in Italy who studies China’s economy.
“Xi was able to capitalize on an ongoing entrepreneurial movement and rapid development of a private [sector] economy prior leaders had unleashed,” she added.
Rather, in recent years, Xi’s policies havecaused some massive headaches in China.
A sweeping crackdown by Beijing on the country’s private sector, that began in late 2020, and its unwavering commitment to a zero-Covid policy, have hit the economy and job market hard.
“If anything, Xi’s leadership may have dampened some of the country’s growth dynamic,” Opper said.
More than $1 trillion has been wiped off the market value of Alibaba and Tencent — the crown jewels of China’s tech industry — over the last two years. Sales growth in the sector has slowed, and tens of thousands of employees have been laid off, leading to record youth unemployment.
The foregoing has an implication for the expectation that China would lead the rest of the world.
China overtook Japan to become the world’s second largest economy.
It grew at a phenomenal pace since then. With an average annual growth rate of 6.7% since 2012, China has seen one of the fastest sustained expansions for a major economy in history. In 2021, its GDP hit nearly $18 trillion, constituting 18.4% of the global economy, according to the World Bank.
China’s rapid technological advances have also made it a strategic threat to the United States and its allies. It’s steadilypushing American rivals out of long-held leadership positions in sectors ranging from 5G technology to artificial intelligence.
CNN Business
