By Stephen Harner
China’s “new normal” economic slowdown is giving the “coming collapse…” crowd new hope. They will, however, be disappointed and proven wrong, again.
China will certainly pull out of its slump, continuing to grow and prosper. Xi Jinping’s “China Dream” will increasingly be materialized, with tremendously positive consequences not just for the Chinese people, but for all the world’s people.
I am in Shanghai now, staying in the flat we purchased 20 years ago in a small quarter of Puxi (Dapuqiao) then a slum of shabby, ramshackle tenements, on the south side of what had been a fetid trench that was the boundary of the “pre-liberation” foreign concession area, hardly reachable by narrow roads.
Today, around our complex of 33 story apartment towers, are highrise office buildings, hotels, and very busy shopping malls. We walk across an eight lane, busy boulevard (waiting to cross, I amuse myself by sighting Maseratis, Ferraris, Bentleys, and Porches that pass) to enter a subway system that is as extensive as Tokyo’s or New York’s; hop into cabs or local Uber-like online call-cars that enter nearby intersections of elevated freeways; and have a choice of literally dozens of restaurants and cafes–including McDonald’s, KFC, Starbucks, Dunkin’ Donuts, and Pizza Hut–at which to relax and eat.
The development of Dapuqiao is hardly exceptional. Rather it is typical of what has happened in a majority of districts in Shanghai, and in many, many cities, towns, and villages large and small throughout China.
Has such development and growth stopped? Decidedly not. When the skeptics and nay-sayers auger “collapse” or “hard landing” they ignore or unduly discount how China–by which I mean the hundreds of millions of actors within the Chinese economic, social, and political system–has overcome seemingly insurmountable obstacles and deprivations to achieve a pace and depth of economic, social, cultural–and, it should be fairly acknowledged, political–advance virtually without precedent or parallel in human history.
To bet (or wish) that China has lost its touch is not only self-deluding, it is also an unpardonably obtuse and self-defeating business strategy.
This is a point also made by one of Japan’s most perceptive and expert analysts, Seguchi Kiyoyuki, senior researcher at the Canon Institute for Global Studies (CIGS), in a October 21 post on the CIGS website. Seguchi writes that growth in manufacturing may be slowing, or even declining, but Chinese living standards, disposable income, and consumer spending continue to rise, with no end in sight.
Chinese tourists’ “explosive buying” (bakugai) of Japanese goods while in Japan has become a lifeline for some manufacturers, while constituting vital support for whole industries. Seguchi stresses that Chinese tourists are still only a small fraction of the total number of Chinese whose rising incomes and increasingly discriminating tastes make them potential customers for high quality Japanese products. Read more