Opinion | How is China's economy really doing
By Tom Fowdy
This morning news emerged that China's Gross Domestic Product had increased by 3.9% year on year. The data, which was released following the conclusion of China's National Party Congress, had been previously embargoed, but beat expectations. It also came against the grain of a narrative in the western mainstream media which has sought to depict China's economic situation as poor. The BBC described this, in their blatant propaganda onslaught against the congress over the past few days, as an "economic crisis" and the argument seems to center around the premise that China's strict zero-covid policy has hampered growth. It nonetheless feeds into a broader western media discourse which always argues that China's economic outlook is exclusively negative.
So how is China's economy really doing? Not surprisingly, the usual critics have jumped to argue that the GDP figure of 3.9% is essentially overstated or even faked. Undoubtedly, there is an empirical basis to argue that China's economy is encountering challenges in 2022. First of all, economic growth around the world has been hampered by the war in Ukraine which has created grave uncertainties in markets, spooked investors, produced an energy crisis, crippling rates of inflation in the west and thus a global economic slowdown. China is of course not as deeply affected as the nations of Europe, but the global economy is otherwise interconnected, therefore, there is an impact.
The lengthy Shanghai lockdown in the 2nd quarter of this year pushed GDP into contraction by freezing the economy of China's largest city, hitting production and employment. Of course, the on-and-off shutdowns throughout the country also have a detrimental impact on consumption, retail and tourism too as they limit people's spending, past-times and freedom of movement. So, it is logical to say this has diminished China's GDP growth somewhat, and is likely why the 5.5% annual target is to be out of reach.
However, this does not mean things are in a "crisis" as the media likes to claim. Even beyond covid, there is an innate bias in the western mainstream media which always portrays China's economic prospects in exclusively pessimistic terms. This is both political and ideological. In contrast, coverage of the US economy is always positive, even when the reality is in fact negative. The western mainstream media do not want to depict China's growth in successful terms, and jump at every opportunity to depict a looming crisis in the country of sorts. This collective discourse might be called "the coming collapse of China", the assumption that failure of China's political and economic system, is inevitable. So therefore, even when China is objectively outgrowing the west in terms of GDP, the theme is still negative and always focusing on the challenges and downsides, as opposed to the prospects.
In taking this path, the media constantly play down the strengths and resilience of the Chinese economy as a whole. It is ignored that China's export markets remain very strong in the overall picture, that even with global challenges, the Asia-Pacific region is growing at large this year and that the Chinese government likewise has an extraordinary range of fiscal and monetary tools in order to keep the economy ticking along even with costly policies such as zero-covid. The state has the ability to keep growth rolling by investing in the very rapid construction of infrastructure at a pace and scale of organization that western countries cannot keep up with. Likewise, as it has not reached its full development potential, there is constant room for growth expansion within China's own markets.
In addition, despite a slowdown, China's economy in the past three years has remained more stable than the west's because it has been able to avoid the extreme policy options utilized in respect to covid. While western economies tanked in 2020, China was able to still attain some growth without resorting to extreme stimulus policies as seen in the west. In doing so, China was able to attain robust growth and a full recovery in 2021, without then suffering from a tidal wave of inflation and having to resort to counterproductive monetary policies which then diminished growth. When viewed from this fairer perspective, China has made fewer economic mistakes than the west, despite its adherence to zero-covid, and therefore has a more stable domestic environment. So why exactly is it controversial that China's economy is in fact continuing to grow, while western countries are faced with contractions and recession? The answer is they simply do not want to admit that China is doing well and they are so obsessed with the perceived flaws in China's system that they negate their own failures at home. China has encountered some speedbumps. It's been an unpleasant year for the whole world, but that doesn't mean their growth has stopped, as some would hope.
The author is a well-seasoned writer and analyst with a large portfolio related to China topics, especially in the field of politics, international relations and more. He graduated with an Msc. in Chinese Studies from Oxford University in 2018.
The views do not necessarily reflect those of DotDotNews.
Read more articles by Tom Fowdy:
Opinion | Hong Kong rioters bring their tactics to Britain's shores
Opinion | What is China's Party Congress all about
Opinion | How one fake story illustrates the West's ignorance of China
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