Rameez Ansari describes the downward trend experienced by the Chinese economic power
Till recently China was projected to emerge as the economic superpower second to none and was expected to dominate the global political and economic agenda. It had started to flex its soft power muscle through its extremely ambitious Belt and Road Initiative worth trillions of dollars spanning continents and was providing loans for projects ranging from infrastructure to welfare projects with well-thought-out plans though most of such arrangements were far from transparent raising some serious skepticism about them. Moreover, this opaque tendency is also witnessed in almost every aspect of Roadblocks impeding Chinese growth life though the inhabitants of that country are conditioned to accept it in totality. The impression now emerging is that China is now overburdened by its own development expectations and extraordinarily counterproductive government diktat.
A decade before China was leading the Western world in almost all aspects of research and development spending almost 80 percent of the equivalent of what the western world spent on it but then the Chinese leadership drifted far too much into military technology neglecting commercial technologies. The military megalomania started a mad race to develop artificial intelligence systems predominantly geared towards military purposes overlapping their original idea.
Gradually a bulk of resources were devoted to such research and the efforts became so obvious that the western world became suspicious ultimately denying China participation in the 5G competition and banning Huawei, the largest Chinese technology company. The situation got so bad that the CFO of Huawei was kept in jail in Canada at the behest of America and was released after some time and deported to China.
China faces the risks from venture capitalists who have learned their trade from Silicon Valley and the top of such outfit is Sequoia China, a subsidiary run by American-trained venture capitalists and there are several other firms in the mainland. It is a well-known fact that capital has a suspicious way of tilting toward the way the wind blows and such changes could well become existential threats.
This may be the reason that the Chinese leadership is getting jingoistic by the day and issuing warnings of the impending armed struggle with giving calls for readiness. This indicates the growing isolation of Chinese leadership that is a crucial impediment to the development of the country.
One important factor is the dwindling economic growth of China which is projected to come in at just over 3 percent this year which is much lower than the official target of 5.5 percent. This situation is radically different than the 8 percent regular growth of the last decade pointing out that the authoritarian regime has reached its limits.
The frightfully shortsighted decision of the Roadblocks impeding Chinese growth regime was not to import foreign vaccines and instead it imposed draconian lockdowns on Shanghai and dozens of cities at the outbreak of the Coronavirus bringing ruins to the economy from which it has not been able to recover.
China is notorious for manipulating its exchange rate and is widely reviled for it. Though this policy has resulted in boosting exports but has also led to an unsustainable trade surplus that was channelized into a construction boom. As it happened China’s largest property developer defaulted angering the buyers of unbuilt apartments with a mortgage boycott spreading to more than 100 cities.
Chinese Leadership Cracks Down
The result is that home prices have fallen for the whole year that in turn has depressed a quarter of the economy. This has become a serious problem and may negatively affect the overall situation of the economy which is already in a state of decline. China, as a policy, cannot tolerate independent entrepreneurs as was evident by the treatment meted out to Jack Ma who tried to act like a western entrepreneur and was made to disappear for a while and is lying low since his disappearance.
Not only that but Roadblocks impeding Chinese growth leadership also cracks down on any prominent person who it suspects may get out of line as happened in the case of the head of Interpol who was selected himself by President Xi Jinping for this position but was arrested when he was called back to visit Beijing and since then has not been seen anywhere. This state of affairs will certainly discourage the next generation of technologists.
China also is reaping the harmful consequences of the hubris-driven policy imposed 1979 one-child policy resulting in sex-selective abortions, a gender imbalance, and a fertility rate that cratered even faster than it would have if China had followed the standard pattern of a developing country. Realizing the mistake the leadership changed the policy in 2016 to two-child and in a panic last year to a three-child but the fertility has shown no sign of picking up with the country left to deal with increasing problems with the old population. The Weekender