Chinese Economy Headed to a Dead-End: Scholar

The plan by China’s leaders to revive its slumping growth via a surge of exports will only create more tension with its trade partners, according to scholar Anne Stevenson-Yang, who said that “years of erratic and irresponsible policies, excessive Communist Party control and undelivered promises of reform have created a dead-end Chinese economy of weak domestic consumer demand and slowing growth.”

Stevenson-Yang, who is a co-founder of J Capital Research and author of ‘Wild Ride: A Short History of the Opening and Closing of the Chinese Economy,’ noted Beijing’s failings in an opinion piece in the New York Times last Saturday, but predicted the tide of cheap exports would continue, while Chinese people “become increasingly unhappy with their gloomy economic prospects” and Communist Party leaders “respond with more repression.”

The Communist Party’s “excessive control” of China’s economy was the root cause of its problems but that wasn’t going to change as its leaders felt that freeing up the private sector and empowering Chinese consumers to spend more “would mean overhauling the way the government works,” as it would undermine the party’s power and that was unacceptable, she said, adding that the country’s “reform and opening” era had ended with a whimper.

She believed China would not be able to innovate its way out of this slump because its economic model has mainly focused on cheap copies of existing technologies, not industrial or commercial breakthroughs.