On February 5th, Dexter Roberts co-authored an article, “Is China’s Economic Success to Be Applauded, or Feared” on Pairagraph in a debate format with Branko Milanovic, Visiting Presidential Professor at the Graduate Center City University of New York.
In the article, Roberts argues that while the Chinese Communist Party’s (CCP) economic policies since the 1980s may have lifted many Chinese people out of poverty, not only was much of this growth a mere correction of the damages done by the misguided growth policies of Mao Zedong but its methods have also left deep fissures in China’s economy. Mass resettlement programs have left many large communities in economic uncertainties, and discriminatory regulations preventing migration from the countryside to the cities are deepening the socio-economic gap. Such deep fault lines, he argues, may hold back China’s continued growth and transition to a consumption driven economy.
Officials are touting a “dual circulation” strategy to grow household consumption, still stuck at around 40 percent of GDP; that won’t be easy given stagnant incomes for the less well-off in China’s lopsided recovery from the pandemic. Consumption spending per capita, adjusted for inflation, dropped 4 percent in 2020, while investment in fixed assets like real estate and infrastructure grew by 2.9 percent, according to the Chinese statistics bureau; industrial production grew rapidly with crude steel output reaching 1 billion tons, a new record – not a good sign for the long sought after goal of rebalancing. While some of the China model may be worthy of imitation, its real flaws are not.
