When China stumbles, the world economy will shudder Napoleon famously observed that when China awoke from its long slumber the world would shake. Now that the Chinese economy has certainly awoken, were he alive today Napoleon might have warned that when the Chinese economy stumbles the rest of the world’s economy will also suffer. He might have done so particularly because there are all too many reasons to believe that China will soon begin a renewed and lengthy period of economic stagnation. Judging by the cavalier manner in which President Trump has been waging his U.S.-China trade war without much regard for the global economic consequences of that war, one could be forgiven for thinking that the Chinese economy has little systemic importance for the global economy. But the truth of the matter is that China’s spectacular economic performance over the past 30 years has propelled it from a situation where it accounted for less than 2 percent of the global economy to one where it now accounts for more than 16 percent. In addition, as the world’s second largest economy, over the last decade the Chinese economy has been the principal engine of world economic growth and the driving force for an international commodity price boom. Anyone doubting China’s importance to the world economy need only consider the fallout of the U.S.-China trade war. As the IMF has recently noted, not only has that trade war caused the Chinese economy to slow markedly, it has also upended the world economy. In 2018, 75 percent of the world’s economies were experiencing upswings; now, 90 percent of the world’s economies are now experiencing downturns. Sadly, even were the U.S.-China trade war soon to be resolved there are several basic reasons to believe that China’s best economic days are behind it. This does not bode well for the rest of the global economy, and it certainly does not bode well for those emerging market economies that have come to depend on a Chinese-fueled international commodity boom. Among China’s more immediate economic Achilles’ heels is its highly unbalanced economy. Not only is China an overly export and investment- dependent economy, it has also experienced a credit bubble of epic proportions. According to the IMF, Chinese investment still accounts for more than 45 percent of the country’s GDP, which is more than double the corresponding ratio in the United States. Meanwhile, over the past decade credit to China ’s non-public sector has increased by around 100 percent of GDP, which the Chinese government itself recognizes to be a dangerously unsustainable situation. This rate of credit expansion exceeds that in Japan prior to the bursting of its bubble in the 1980s and that in the United States in the run-up to its 2008 credit and housing market bust. It has also given rise to a situation where China has a massive amount of unused industrial capacity and an enormous overhang of unoccupied housing and commercial property. Recent experience with the bursting of outsized credit bubbles, like those in Japan, Spain and the United States, does not portend well for China’s long-run economic performance. In the best of circumstances, China, like Japan before it, is likely to experience a prolonged period of relative economic stagnation. It will do so as its banks’ balance sheets become clogged with non-performing loans and where the need to prop up zombie enterprises will preclude the flow of credit to the more dynamic sectors of its economy. Another immediate factor that does not bode well for China’s future economic performance is President Xi seeming intention to kill the goose that has laid the Chinese economy’s golden egg. He is doing so by reversing the economic reforms introduced by Deng Xiaoping in 1979 aimed at giving the private sector increased room to breathe dynamism into the Chinese economy. Fearful of the challenge that a thriving Chinese economy might pose to the Communist Party’s political hold on the country, President Xi is now reestablishing party discipline and increasing the role of China’s state enterprises. Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it becomes rich. All of this is not to say that the Trump administration is mistaken to exert real pressure on China to level the trade playing field and to have China desist from intellectual property theft and forced technology transfer. Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy. Desmond Lachman is a resident fellow at the American Enterprise Institute. He was formerly a deputy director in the International Monetary Fund's Policy Development and Review Department and the chief emerging market economic strategist at Salomon Smith Barney. Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it becomes rich. A16ll of this is not to say that the Trump administration is mistaken to exert real pressure on China to level the trade playing field and to have China desist from intellectual property theft and forced technology transfer. Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy. Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it becomes rich. All of this is not to say that the Trump administration is mistaken to exert real pressure on China to level the trade playing field and to have China desist from intellectual property theft and forced technology transfer. Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy.
中国最近十多年的经济发展是全球经济增长主要动力。床铺搞贸易战打击中国，造成中国经济放缓，拖累全球经济增长。世界各国，甚至包括欧盟经济龙头的德国都出现了停滞。这个对于世界经济打击还会继续加大。现在全世界出现的这些抗议浪潮政治动荡豆或多或少跟这个经济下行压力有关。底层民众对于经济波动非常敏感。差一点就要活不下去，要上街抗议了。床铺贸易战这把火将来会产生不可预测的后果。
When China stumbles, the world economy will shudder
Napoleon famously observed that when China awoke from its long slumber the
world would shake.
Now that the Chinese economy has certainly awoken, were he alive today
Napoleon might have warned that when the Chinese economy stumbles the rest
of the world’s economy will also suffer. He might have done so particularly because there are all too many reasons to believe that China will soon
begin a renewed and lengthy period of economic stagnation.
Judging by the cavalier manner in which President Trump has been waging his U.S.-China trade war without much regard for the global economic
consequences of that war, one could be forgiven for thinking that the
Chinese economy has little systemic importance for the global economy.
But the truth of the matter is that China’s spectacular economic
performance over the past 30 years has propelled it from a situation where
it accounted for less than 2 percent of the global economy to one where it
now accounts for more than 16 percent. In addition, as the world’s second
largest economy, over the last decade the Chinese economy has been the
principal engine of world economic growth and the driving force for an
international commodity price boom.
Anyone doubting China’s importance to the world economy need only consider the fallout of the U.S.-China trade war. As the IMF has recently noted, not only has that trade war caused the Chinese economy to slow markedly, it has also upended the world economy. In 2018, 75 percent of the world’s
economies were experiencing upswings; now, 90 percent of the world’s
economies are now experiencing downturns.
Sadly, even were the U.S.-China trade war soon to be resolved there are
several basic reasons to believe that China’s best economic days are behind it. This does not bode well for the rest of the global economy, and it
certainly does not bode well for those emerging market economies that have
come to depend on a Chinese-fueled international commodity boom.
Among China’s more immediate economic Achilles’ heels is its highly
unbalanced economy. Not only is China an overly export and investment-
dependent economy, it has also experienced a credit bubble of epic
proportions.
According to the IMF, Chinese investment still accounts for more than 45
percent of the country’s GDP, which is more than double the corresponding
ratio in the United States. Meanwhile, over the past decade credit to China
’s non-public sector has increased by around 100 percent of GDP, which the Chinese government itself recognizes to be a dangerously unsustainable
situation.
This rate of credit expansion exceeds that in Japan prior to the bursting of its bubble in the 1980s and that in the United States in the run-up to its 2008 credit and housing market bust. It has also given rise to a situation
where China has a massive amount of unused industrial capacity and an
enormous overhang of unoccupied housing and commercial property.
Recent experience with the bursting of outsized credit bubbles, like those
in Japan, Spain and the United States, does not portend well for China’s
long-run economic performance. In the best of circumstances, China, like
Japan before it, is likely to experience a prolonged period of relative
economic stagnation. It will do so as its banks’ balance sheets become
clogged with non-performing loans and where the need to prop up zombie
enterprises will preclude the flow of credit to the more dynamic sectors of its economy.
Another immediate factor that does not bode well for China’s future
economic performance is President Xi seeming intention to kill the goose
that has laid the Chinese economy’s golden egg. He is doing so by reversing the economic reforms introduced by Deng Xiaoping in 1979 aimed at giving
the private sector increased room to breathe dynamism into the Chinese
economy. Fearful of the challenge that a thriving Chinese economy might pose to the Communist Party’s political hold on the country, President Xi is
now reestablishing party discipline and increasing the role of China’s
state enterprises.
Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it
becomes rich.
All of this is not to say that the Trump administration is mistaken to exert real pressure on China to level the trade playing field and to have China
desist from intellectual property theft and forced technology transfer.
Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic
challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy.
Desmond Lachman is a resident fellow at the American Enterprise Institute.
He was formerly a deputy director in the International Monetary Fund's
Policy Development and Review Department and the chief emerging market
economic strategist at Salomon Smith Barney.
Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it
becomes rich.
A16ll of this is not to say that the Trump administration is mistaken to
exert real pressure on China to level the trade playing field and to have
China desist from intellectual property theft and forced technology transfer. Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic
challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy.
Yet another factor likely to sap China’s economic growth in the years ahead is its very poor demographics. Largely as a result of its one-child policy, the Chinese labor force is expected to decline by some 25 percent over the next thirty years. This has prompted Nick Eberstadt, my American Enterprise Institute colleague, to observe that China is set to become old before it
becomes rich.
All of this is not to say that the Trump administration is mistaken to exert real pressure on China to level the trade playing field and to have China
desist from intellectual property theft and forced technology transfer.
Rather, it is to say that in formulating its international economic policy, the administration should not exaggerate China’s long run economic
challenge to the United States and should take into account the impact of a slowing China on the rest of the global economy.
最主要的原因是美联储连涨九从息， 再加缩表。
美联储是实际上的全球央行， 炮儿这个雏现在总算是明白了。