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2024: PRC Economist Teng Tai on Stimulating the Chinese Economy and Addressing Systemic Issueshttps://gaodawei.wordpress.com/2024/10/15/2024-prc-economist-teng-tai-on-stimulating-the-chinese-economy-and-addressing-systemic-issues/

As a not even barefoot economist, I found the Teng Tai’s capsule characterization and putting into Chinese national and international perspective the challenges facing the Chinese economy and how they might be addressed illuminating. Economists have for a very long time argued that China puts too many resources into less productive investment and needs to rebalance its economy by putting more emphasis on consumption.

Ironically for a socialist county, the difficulty in doing this is more political than economic — opposition from entrenched interest groups and a ruling Party with a laser focus on preventing anything that might cause social disruption, political instability and its monopoly on power. Would radical changes in the Chinese economic model — yet another wave of opening and reform running counter to the general tightening that has continued (albeit accelerated under General Secretary Xi) ever since the last years of Party General Secretary Jiang Zemin — favor the emergence of non-Party power centers in China? Something the Party must be worry about. The collapse of the Soviet Union under Gorbachev’s fast-paced reforms has been much studied in China.

Would changing course mean that Party policies had been wrong? The counter-argument would be that old policies were correct before, now we have to adopt new policies for the changed situation. I wonder if that might work better for a new leader than for a Party Secretary who has already been in power for ten years trumpeting his plans for China in the New Era. Would major changes now that harm Xi as leader as well as the political legitimacy of the Chinese Communist Party?

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thanks David. I will pass it on to Itamar.

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