As China’s economic momentum falters, it strives to maintain hold on global influence, identity
- Beijing sends out officials to counter this ‘peak status’ perception, acknowledging short-term problems but framing long-term economic growth as inexorable
- An entrenched narrative that a country has peaked can significantly affect investor behaviour, leverage and the degree to which it is courted and feared
Chinese diplomats are struggling to counter the narrative that China is entering a downward economic spiral, wary of blunting the nation’s reputation for inexorable growth and the many benefits that have resulted.
At home and abroad, its struggling economy has spurred unwelcome questions over whether this is a permanent change or a blip in its decades-long expansion – and what that means for Beijing’s global identity, leverage and soft power premised on unstoppable momentum.
“The perception of the inevitability of China’s continued economic success and becoming a superpower gives China enormous economic and political influence today, at home and internationally,” said Scott Kennedy, senior adviser at the Centre for Strategic and International Studies. “So a bursting of that perception has enormous consequences.”
China has long defied expectations with its size, track record and apparent ability to defy conventional logic, as the “socialist” economy repeatedly proved more resilient and adaptable than expected, posting GDP growth of nearly 10 per cent annually between 1990 and 2010.
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Over time, that translated into structural power, allowing it to demand favourable trade terms, technology-transfer deals and strategic investments. Its massive lending programmes, Belt and Road Initiative and military expansion, in turn, have allowed it to shape global Taiwan policy, human rights and other “red-line” issues.
“It brings so much upside to China that, if countered in any significant way, it has really negative ramifications,” said Kennedy. “There’s a fear that this sense of China’s day having come and gone needing to be countered with a consistent, more positive, upbeat message.”
