China’s historical toolkit fails to boost economy
China’s economic growth prospects are being damaged by unrealistic targets, leading to a decline in consumer spending, manufacturing, and trade, according to a report by Khabarhub. China’s GDP growth target for 2022 is more than 5 per cent, but the actual achievement has been around 3 per cent. The annual plenary sessions of the 14th National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC) indicate that China’s GDP is likely to decline in the coming years due to several factors. China’s historical approach of accumulating foreign investment to boost the economy until it matches propaganda is no longer viable.
After three years of enforcing a state policy of zero COVID, China has reopened its economy. However, the collapse of Evergrande after years of uninhibited expansion shows the reality of China’s economy. The real state of China’s economy has worrying consequences for the world, including the debt traps it has embedded in Africa and the failure of its Belt and Road initiative, which is now characterized by coercion and banditry.
China’s political goals for the coming year focus on foreign investment, but the geopolitical realities make it impossible to achieve its projected GDP growth rate, according to Khabarhub. To maintain its charade as a relevant world superpower, China plans to solicit nearly USD 550 billion in the form of special local government bonds while increasing defence spending by nearly 7.2 per cent to USD 225 billion in 2023. The nature of these actions contradicts China’s official propaganda messaging on seeking peaceful reunification with Taiwan and ensuring self-reliance in the tech industry.
China is defaulting on its promises during COP27, and while it claims to crack down on carbon data fraud and encourage further investment in wind and solar projects, this message contradicts the government’s other actions. There are also concerns about the workforce and the declining birth rate, with rumours about lowering the legal age of marriage to address the ageing workforce. The majority of Chinese economists believe that demographics will no longer drive economic growth.
In conclusion, China’s unrealistic economic targets and historical approach of accumulating foreign investment to boost its economy are hurting its growth prospects. The collapse of Evergrande and China’s debt traps in Africa and failure of the Belt and Road initiative have worrying consequences for the world. China’s political goals contradict its official propaganda messaging, and there are concerns about the workforce and declining birth rate. Demographics are no longer expected to drive economic growth in China.
