By Edward Wong and Ivan Chu

Since the end of the COVID-19 pandemic, the Western mainstream media have enthusiastically promoted the “Chinese collapse” theory. They argue that China’s economic recovery has fallen short of expectations, and they claim that China is suffering from the ongoing trade war with the United States, leading to setbacks in technological development and foreign trade. 

They argue that China’s demographic dividend has disappeared, draining the economy of momentum. But Chinese Foreign Minister Wang Yi recently pointed out that the country’s growth engine remains robust, citing last year’s data, which indicated that the country’s economy grew by 5.2 percent and contributed one-third of the global growth in 2023. These figures have effectively refuted the “Chinese collapse” theory and prompted a critical reflection on the justifications behind it.

In fact, many of the arguments put forward by those doom-mongers are one-sided and overlook the deep roots and strengths of China’s economy. Since the US launched a trade war and imposed tech bans on China, the Chinese government has provided strong support to the country’s industries, preventing it from repeating Japan’s compromise with the United States in the 1980s, which led to stagnation in technological innovation, industrial upgrading and productivity levels. Huawei’s successful launch of advanced smartphones last year reflects China’s achievements in 5G chip development. The country has also witnessed significant growth in other high-tech industries like electric vehicles, with research firm Canalys reporting that in the first half of 2023, of the top 20 global electric vehicle models, 12 were produced by Chinese automakers. According to data from the Japan Automobile Manufacturers Association and the China Association of Automobile Manufacturers, Japan exported 3.99 million vehicles in the first 11 months of 2023, while China exported 4.41 million vehicles, indicating that Japanese companies are lagging behind in the electric vehicle field compared to their Chinese counterparts.

The “demographic dividend” argument is oversold. China is shifting from “demographic dividend” to “talent dividend” for growth impetus, with significant improvements in the country’s education. According to data from the National Development and Reform Commission, the average education level of the country’s workforce has reached 11 years, and that of the newly added labor force has reached 14 years. Additionally, improvements in health, increased labor productivity, the growth of the middle-income group, and the availability of exceptional talent to support the country’s modernization explain why the country continues to make breakthroughs in high-end industries and scientific research despite the concerted efforts of the US and its allies to suppress it.

In terms of foreign trade, despite the US’ continuous efforts to rally support from its allies to isolate China and establishing supply chains without China’s involvement, Europe has repeatedly disregarded US intentions and cooperated with China economically. French President Emmanuel Macron led a large delegation to China last year for trade negotiations, and German Chancellor Olaf Scholz is set to lead a business delegation to China next month; both of these trips demonstrate the continuous strengthening of cooperation between China and European countries. According to data released by China’s Ministry of Commerce in January, the actual use of foreign investment in the country in 2023 was 1.134 trillion yuan ($157.6 billion), a decrease of 8 percent compared with the previous year but still at a historically high level. Moreover, 53,766 new foreign-invested enterprises were established in China, registering a year-on-year increase of 39.7 percent. This indicates that the US’ efforts to isolate China have not been effective, and foreign companies are still enthusiastic about investing in China.

Although China faces more challenges in technological development and foreign trade due to the US-China trade war, it has a solid economic foundation and strong government support for industries. Therefore, China has made breakthroughs in new technological fields and trade, demonstrating its resilience in the face of the trade war and rebutting the notion that it is losing out in the trade war and in the anti-globalization campaign initiated by the US. In fact, the US has also suffered from the trade war. Prior to the beginning of the trade war, many Chinese companies imported a large number of chips from US firms; the US government’s blockade policy has affected numerous US enterprises.

For the sake of the world’s overall well-being, Western media and economic experts should adopt a more objective and rational perspective on the economic challenges and opportunities China faces; advocate sustainable, mutually beneficial cooperation between China and the US; and urge the US government to implement more enlightened trade policies that allow businesses around the world to progress through fair competition and cooperation, as well as promoting technological development and trade growth in an extended era of globalization.

Edward Wong is a researcher of the Hong Kong Sustainable Development Research Institute;

Ivan Chu is a member of the Chinese Association of Hong Kong and Macao Studies.

The views do not necessarily reflect those of Bauhinia Magazine.

Source: China Daily