Opinion | How sustainability is driving China’s next economic transformation
- Despite some progress, the Chinese economy still faces problems but these can be overcome with targeted stimulus measures and a focus on sustainable development
- By framing China as a threat, the US risks impeding global sustainability efforts
There was some good news for China’s economy this week, with first-quarter gross domestic product (GDP) figures better than expected. However, structural and cyclical issues persist, and the consequences of policy missteps cannot be stressed enough.
Accordingly, calls urging China to boost confidence and consumption are well placed. However, doing so without addressing the underlying issues is akin to treating the symptoms, not the cause, of an illness – to use a Chinese medicine analogy.
China’s previous high GDP growth model served its historical mission well, but it has now become the underlying cause of the current economic predicament. The “prescription” requires a painful transformation to a new sustainable development model.
Many Western narratives red-flag China’s economic situation when, in fact, these are the side-effects of the transformation China initiated in 2014 by ushering in a “new normal” and ditching high GDP targets.
China plays the long game, and an appreciation of its history and sociopolitical dynamics is essential for a proper assessment of its economy.
