Nancy Qian

The View | China’s economy after 10 years of Xi Jinping: what worked, what didn’t

Xi’s biggest problems – economic slowdown, demographic challenges, inequality, pollution – were inherited but so were the main policy solutions

What changed most under Xi was the mode of implementation – announcing major policies suddenly and without much apparent deliberation has been economically harmful

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Xi Jinping, general secretary of the Central Committee of the Communist Party of China, Chinese president and chairman of the Central Military Commission, is ready for a National Day review of the armed forces as a limousine carrying him drives out of the Tiananmen Rostrum during the celebrations for the 70th anniversary of the founding of the People’s Republic of China in Beijing on October 1, 2019. Photo: Xinhua

Nancy Qian

Published: 4:30pm, 11 Oct 2022

Xi Jinping is poised to become the first three-term president in Chinese history when the Communist Party’s 20th National Congress convenes this month. That makes this an opportune time to take stock of Xi’s economic-policy record from the past 10 years and explore some steps to improve economic performance.

When Xi assumed China’s top political position in 2012, the economy was thriving but also had many serious problems. Gross domestic product had been growing at an average annual rate of 10 per cent for over a decade. But a slowdown was inevitable, and growth rates have declined almost every year since 2008.

By the start of this century, inequality in China had surpassed that of the United States. Meanwhile, pollution was literally killing China. By 2013, Beijing’s air had an average of 102 micrograms of PM2.5 particles per cubic metre. Chinese city dwellers increasingly complained about the cardiopulmonary illnesses and early mortality associated with pollution.

China was also plagued by water pollution, owing to the chemical run-off from its factories, farms and mines. In rural areas, entire villages and towns sometimes had to move because their water supply had been irreparably contaminated.

China was also gradually losing its workforce. Fertility rates of around six children per woman started to decline in the 1970s and reached their current levels of under two children per woman in 2000. China’s working-age cohort shrank from 80 per cent of the population in 1970 to only 37 per cent in 2012. The share of individuals over age 65 doubled, from 4 per cent in 1970 to 8 per cent in 2012.

These trends left the government stuck between a rock and a hard place. Though policymakers needed to keep the population from ballooning, they also needed to maintain the supply of young working people. Social discontent was rising and public perception of government corruption doubled between 1991 and 2012. Around 1,300 labour strikes were documented in 2014; by 2016, that figure had more than doubled, to 2,700.