An increasingly autocratic government is making bad decisions
Aug 24th 2023
WHATEVER HAS gone wrong? After China rejoined the world economy in 1978, it became the most spectacular growth story in history. Farm reform, industrialisation and rising incomes lifted nearly 800m people out of extreme poverty. Having produced just a tenth as much as America in 1980, China’s economy is now about three-quarters the size. Yet instead of roaring back after the government abandoned its “zero-covid” policy at the end of 2022, it is lurching from one ditch to the next.
The economy grew at an annualised rate of just 3.2% in the second quarter, a disappointment that looks even worse given that, by one prominent estimate, America’s may be growing at almost 6%. House prices have fallen and property developers, who tend to sell houses before they are built, have hit the wall, scaring off buyers. Consumer spending, business investment and exports have all fallen short. And whereas much of the world battles inflation that is too high, China is suffering from the opposite problem: consumer prices fell in the year to July. Some analysts warn that China may enter a deflationary trap like Japan’s in the 1990s .
Yet in some ways Japanification is too mild a diagnosis of China’s ills. A chronic shortfall in growth would be worse in China because its people are poorer. Japan’s living standards were about 60% of America’s by 1990; China’s today are less than 20%. And, unlike Japan, China is also suffering from something more profound than weak demand and heavy debt. Many of its challenges stem from broader failures of its economic policymaking—which are getting worse as President Xi Jinping centralises power.
A decade or so ago China’s technocrats were seen almost as savants. First they presided over an economic marvel. Then China was the only big economy to respond to the global financial crisis of 2007-09 with sufficient stimulatory force—some commentators went as far as to say that China had saved the world economy. In the 2010s, every time the economy wobbled, officials defied predictions of calamity by cheapening credit, building infrastructure or stimulating the property market.
During each episode, however, public and private debts mounted. So did doubts about the sustainability of the housing boom and whether new infrastructure was really needed. Today policymakers are in a bind. Wisely, they do not want more white elephants or to reflate the property bubble. Nor can they do enough of the more desirable kinds of stimulus, such as pension spending and handouts to poor households to boost consumption, because Mr Xi has disavowed “welfarism” and the government seeks an official deficit of only 3% of gDP.
As a result, the response to the slowdown has been lacklustre. Policymakers are not even willing to cut interest rates much. On August 21st they disappointed investors with an underwhelming cut of 0.1 percentage points in the one-year lending rate.
This feeble response to tumbling growth and inflation is the latest in a series of policy errors. China’s foreign-policy swagger and its mercantilist industrial policy have aggravated an economic conflict with America. At home it has failed to deal adequately with incentives to speculate on housing and a system in which developers have such huge obligations that they are systemically important. Starting in 2020 regulators tanked markets by cracking down on successful consumer-technology firms that were deemed too unruly and monopolistic. During the pandemic, officials bought time with lockdowns but failed to use it to vaccinate enough people for a controlled exit, and then were overwhelmed by the highly contagious Omicron variant.
Why does the government keep making mistakes? One reason is that short-term growth is no longer the priority of the Chinese Communist Party (CCP). The signs are that Mr Xi believes China must prepare for sustained economic and, potentially, military conflict with America. Today, therefore, he emphasises China’s pursuit of national greatness, security and resilience. He is willing to make material sacrifices to achieve those goals, and to the extent he wants growth, it must be “high quality”.
Yet even by Mr Xi’s criteria, the CCP’s decisions are flawed. The collapse of the zero-covid policy undermined Mr Xi’s prestige. The attack on tech firms has scared off entrepreneurs. Should China fall into persistent deflation because the authorities refuse to boost consumption, debts will rise in real value and weigh more heavily on the economy. Above all, unless the CCP continues to raise living standards, it will weaken its grip on power and limit its ability to match America.
Mounting policy failures therefore look less like a new, self-sacrificing focus on national security, than plain bad decision-making. They have coincided with Mr Xi’s centralisation of power and his replacement of technocrats with loyalists in top jobs. China used to tolerate debate about its economy, but today it cajoles analysts into fake optimism. Recently it has stopped publishing unflattering data on youth unemployment and consumer confidence. The top ranks of government still contain plenty of talent, but it is naive to expect a bureaucracy to produce rational analysis or inventive ideas when the message from the top is that loyalty matters above all. Instead, decisions are increasingly governed by an ideology that fuses a left-wing suspicion of rich entrepreneurs with a right-wing reluctance to hand money to the idle poor.
The fact that China’s problems start at the top means they will persist. They may even worsen, as clumsy policymakers confront the economy’s mounting challenges. The population is ageing rapidly. America is increasingly hostile, and is trying to choke the parts of China’s economy, like chipmaking, that it sees as strategically significant. The more China catches up with America, the harder the gap will be to close further, because centralised economies are better at emulation than at innovation.
Liberals’ predictions about China have often betrayed wishful thinking. In the 2000s Western leaders mistakenly believed that trade, markets and growth would boost democracy and individual liberty. But China is now testing the reverse relationship: whether more autocracy damages the economy. The evidence is mounting that it does—and that after four decades of fast growth China is entering a period of disappointment. ■
==OpenAI翻译==
日益独裁的政府正在做出错误的决定
2023年8月24日
过去的事情如何发生了改变?1978年中国重新加入世界经济之后,它经历了有史以来最辉煌的增长故事。农业改革、工业化和增加收入使近8亿人脱离极端贫困。1980年,中国的经济产值仅为美国的十分之一,而到今天,其规模已达美国的三分之二。然而,2022年底政府放弃“清零”政策后,中国经济似乎并没有如暴风雨 rear般恢复,反而一步步陷入困境。
第二季度,中国经济仅实际增长3.2%,远远低于预期,尤其是考虑到根据一家著名估算机构的数据,美国可能增长近6%。房地产价格下跌,依靠提前销售房屋盈利的房地产开发商陷入困境,令买家谨慎。消费、企业投资和出口均未达到预期。而在世界许多国家面临通膨过高的问题时,中国却面临相反的问题—消费物价同比下跌。一些分析人士警告说,中国可能陷入1990年代日本式的通缩泥潭。
在某种程度上,将中国问题比作日本式停滞也过于轻描淡写。中国人民收入水平低,经济长期增长乏力将造成更大破坏。1990年日本人均GDP已经达到美国的60%,而今天中国才18%左右。而不像日求,中国问题不仅是需求疲软与负债高,更深层次的原因是经济政策制定方面的严重失误,随着习近平加强集权这些问题更显突出。
几年前,中国技术官僚似乎无所不能。他们先带领中国经历经济奇迹,然后在2007-2009全球金融危机中,中国是唯一一个采取足够强力刺激政策的主要经济体,有评论认为中国拯救了全球经济。但2010年代每当经济出现波动,官方都会通过普遍授信、扩大基建建设或刺激房地产市场挽救局面。
然而,每次刺激后公众和企业负债就越积越高。人们也越来越质疑房地产泡沫的可持续性,以及新基建是否确实必要。今天,决策者陷入两难。明智地,他们不想再造白象,也不想再撑房地产市场。但由于习近平反对“福利”,政府宣称只有3%的财政赤字,他们又不能大规模扩大最有效的刺激方式,如提高养老金支出或给贫困群体派款以刺激消费。
结果,应对经济放缓的反应力度不足。政策制定者甚至不愿大幅下调利率。8月21日,中国人民银行 tiny做的0.1个百分点一年期贷款基率下调举动,令投资者深感惋惜。
这种在经济增长和通缩急剧下滑时的力不从心,与中国先前一系列政策失误不无关系。对外强硬和重商主义工业政策加剧了与美国的经济冲突。在国内,房地产泡沫和开发商巨额债务问题处理不当也是原因之一。2020年,监管部门以打击垄断和无序为名,挫败了一些成功的互联网公司。面对疫情,政府以封锁买时日,但没能及时大规模疫苗接种,随后被变种病毒击垮。
政府为何一次次失误?其中一个原因是中共不再把短期经济增长放在首要位置。习近平显然认为,中国必须为与美国的长期经济乃至军事竞争做准备。今天,他强调国家强大、安全和韧性,材质牺牲也在所不惜,经济增长要“高质量”。
但即便按照习近平的标准看,中共也在政策上失误连连。“清零”政策的溃败损害了习近平的威信。打压科技企业令企业家心生惧意。如果中国因拒绝进一步提振内需而滞胀,债务负担将更重。总而言之,除非继续提高人均收入,否则中共很难维持执政合法性和与美国的竞争力。
政策失误之频繁,看上去并不像新一轮国防重于经济的“自我牺牲”,而更像是裁决失误。这与习近平集权和取代技术官僚以亲信为主有关。中国以前对经济还允许些许争论,但今天政府要求分析人士保持虚假乐观。最近更停止披露失业率和消费信心等不利数据。政府高层仍有才能人士,但在上面强调忠诚的环境下,官僚机构不可能产生理性分析和创新主意。决策趋于意识形态化,左派指责富商,右派不拿钱补贫困。
问题源自顶层,也将持续存在,或随着经济挑战加大而恶化。人口高龄化、美国日益对抗,以及在芯片等关键领域被美国限制,都使中国难以应对。中国追赶美国时,难度将越来越大,因为集权经济在创新上弱于效法。
西方对中国的预测过分乐观。2000年代,西方国家错误地认为贸易、市场和增长会促进民主自由。但今天中国在测试相反方向——集权是否损害经济。迹象显示它确有此害,四十年来光荣历程也将终结。
没有评论:
发表评论