China cannot escape 30 years of rule

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General Secretary and President of China Xi Jinping, after speaking at a press conference with members of the new Standing Committee of the Communist Party of China’s Politburo and Chinese and foreign journalists at the Great Hall of the People on October 23, wave hands. 2022, Beijing, China.

Gwynne Dyer is a UK-based Canadian journalist and historian who writes on international affairs.

opinion: Especially the future is hard to predict (as Yogi Berra once said). Moreover, the “golden laws of economics” don’t really exist. There are too many random variables to trust predictions about the future of the economy.

But the 30 year rule is pretty close.

What it says is that an industrialized economy generally has a golden age when the population grows rapidly, lots of cheap labor flows from the countryside to the cities, and the economy grows very quickly. is.

However, this period lasts on average about 30 years, after which growth returns to the familiar 2% to 3% annual rate.

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In England that happened between 1850 and 1880, and in America around 1885-1915 there was a turn. Russia (or the new Soviet Union) had a booming economy in the 1920s and her 1930s, but lost 30 years to Germany’s invasion in 1941.

This pattern has nothing to do with prevailing economic ideology, as clearly seen in the post-World War II “miracle” in East Asia. Japan from 1950 to 1980 is an extreme example. Growth peaked at 12.5% ​​per annum and averaged about 5% per annum until 1980.

At one point, Japan was officially considered the world’s second-largest economy, and land in the gardens of the Imperial Palace in central Tokyo was said to be worth more than the entire state of California.

Thirty years have passed since then, and the Japanese economy has hardly grown since 1990.

South Korea and Taiwan followed the same path a little later, enjoying 30 years of fast growth and now returning to normal developed country interest rates.

So why do so many people think China is exempt from this rule?

China’s three decades of rapid growth began in the early 1980s, with the last year of double-digit growth being 2010.

The International Monetary Fund forecasts 3.2% growth this year, but some observers doubt China’s economy is growing any further. they just lie about it.

But the Western media, especially the US media, are full of articles about the threat that China’s rise poses to US hegemony, or indeed to world peace. Should I submit them with the 1980s ludicrous idea that Japan would become the US’ main rival in the future?

Yes, but the Japanese themselves never gave in to that delusion, so their disappointment when the party was called off was bearable. really believed it had the human and material resources to be a credible challenger to U.S. hegemony.

Ngu Hung Guan/AP

A woman walks her dog while being greeted by another dog near an advertisement for the November 11 Singles Day sale. Chinese consumers are expected to spend tens of billions of dollars on everything from fresh produce to luxury goods during the annual Singles’ Day online shopping festival, but this financial windfall is over. may be approaching

Even if the 30-year rule allowed fast-track re-attempts (which it doesn’t seem to allow), China wouldn’t be a plausible candidate. China’s economy is riddled with underfunded debt, it relies too heavily on coal for energy, and its regime has fallen into the hands of centralization fanatics.

There are no economic miracles there.

Ending the one-child policy did not increase China’s fertility rate, which is now 1.15 children per woman. Not only will this affect aggregate demand (the population will drop by at least half by her 2100), but it will also dramatically change the age profile.

The country will gain another 200 million retirees by 2050. And 200 million working-age people will be lost. Even if all other economic signals were positive, this population decline would paralyze the economy for generations.

This will no doubt bring relief to all those who feared an eventual major clash between the rising powers and the reigning hegemon, the United States, or even a world war.

However, one should not think that the danger will diminish any time soon. Disappointment in Beijing could also fuel a military confrontation with the United States.

A rapidly growing powerhouse can afford to wait. Because the future will only change the balance in your favor. As Deng Xiaoping, who abandoned Mao Zedong’s policies and unleashed China’s 30 years of high growth, used to say, China should “hide its capabilities and wait its time.”

But an ambitious powerhouse whose growth has suddenly stalled is a very dangerous beast. When you see only stagnation and relative decline, you want to go bankrupt before you lose momentum.

It is not clear if President Xi Jinping and his allies still accept the fact that the super-high growth rate of the past will never return, and that China will never be stronger against the US than it is now. .

But they will certainly figure it out in the not too distant future, and that will be the moment of greatest danger.

Gwynne Dyer’s new book is The Shortest History of War. China cannot escape 30 years of rule

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