Officially A No-Growth World

I really don’t think people quite understand just how much trouble China is in right now. That’s no mystery because in the Western media the Chinese economy is almost always described as somewhere between awesome and magnificent (only slight hyperbole). Their government, on the other hand, is not fooled.

General Secretary Xi Jinping opened the Communist Party’s 19th Congress with an amazing speech. It wasn’t amazing in the respect of soaring rhetoric announcing some actual, concrete commitment to freedom and free markets; it was instead the opening bell for, I think, a very different world outlook.

I write for my column tomorrow that it was in some cursory way reminiscent of the Trump candidacy.

On the surface, it almost seemed as if Xi Jinping was channeling Donald Trump. Opening China’s 19th Party Congress this week, the Communist General Secretary of that Congress talked a lot about “rejuvenation.” The word recalled the 2016 US Presidential campaign and the Republican’s promise to “make America great again.”

But what Xi was actually saying was really nothing like “make China great again”, merely an emotional plea in the same economic manner as the American’s campaign. The word rejuvenation that he used repeatedly (in its translation) actually meant in the context of Xi’s speech something very different, more like “make China OK with not great.”

Xi proclaimed a “new era” where the quality of growth would be the priority over quantity or speed. It sounds good until you think about it, as anyone with common sense knows that quality comes from speed. The rejuvenation part was nothing more than making it seem as this was the plan all along; the official version of “oh, hey, we meant to rebalance this whole time.” Only there isn’t any hint of rebalancing.

Just hours after the General Secretary’s speech, China’s National Bureau of Statistics (NBS) published all the necessary estimates to hammer the final nail in the “old era’s” coffin. The Chinese government has tried everything since 2009, to no avail. Apart from what looked like a recovery in 2010 and 2011, it was short-circuited with the rest of the global economy in 2012, unable to shake “whatever” seems to be holding everything back.