China starves its economy of information at its own risk
Subscribe to enjoy similar stories. For decades, a global guessing game has focused on whether the people of China will tire of single-party rule. Any failure to sustain a heady pace of economic expansion, went one hypothesis, would stir mass discontent and put its Communist regime on notice.
With growth having slowed sharply, crunch time is here. Its GDP grew by 5.2% in 2023 and would be lucky to notch 5% this year. A decade-old strategy of shifting the bulk of its value generation from exports to domestic consumption has fared poorly, while President Xi Jinping’s call for “common prosperity" has remained a slogan.
China’s property sector remains in a deep slump, with home values dropping and builders at risk of going bust before they can deliver flats. Other sectors are also haunted by deflation, which can easily get generalized to form a self-fulfilling threat, since it dissuades consumer spending, softens demand further and makes it harder for businesses to pay back loans. Monetary and fiscal policy have tried to cushion the impact, partly by propping up assets and pushing money around, but hard times prevail for large numbers.
Should Donald Trump erect barriers to Chinese imports once he takes over as US president, the going will get tougher. Beijing is only too aware of people’s patience running thin, judging by its response to flickers of unrest. Small protests by workers, home-buyers and other citizens have soared this year, with their list of grievances led by unpaid salaries, stalled housing projects and refund failures.
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