China Research

In the past few weeks, I met quite a number of Chinese economists at different places and conferences.

Totally, some topics were really dominating. Below, I give some brief summery of three points that have been most frequently mentioned and discussed – and of two topics that should be in the headlines:

1. The “One belt, one road”-investment plan

Clearly, the Chinese are very enthusiastic about their mega-infrastructure project “One belt, one  road” from China to Europe (Silk Road Economic Belt & Maritime Silk Road). This major investment  program is assumed to boost the domestic Chinese economy substantially. But the Chinese also emphasize that benefits will reach Western Europe. How much this really will be the case remains to be seen However, it should be said that the (Swedish) press and potentially involved companies in Sweden and other countries should have a regular eye on developments of the Chinese “One belt, one road”-plan – despite the uncertain dimensions of this project.

2.  The deterioration of U.S.-China relations

There is no doubt that the political relations between the United States and China have been deteriorating more recently. The absence of a red carpet at president Obama’s arrival to the G20 summit in Hangzhou was mostly symbolic. The underlying problems, however, are currently much deeper and more fundamental.

3. China is really concerned about Europe/the EU

China’s uncertainty about Europe/the EU and investments and sales there has obviously been increasing in the past few quarters – and even more after the British exit voting. Europe/the EU have lost recognition in China, at least currently.

4. Insufficient knowledge about the current status of Chinese economic reforms

It seems to be striking that many Chinese economists are so little informed about all the ambitious reform plans from the Third Plenum –
and how much has been achieved so far. Transparency seems to be lagging  substantially. This can be considered as a serious shortcoming. How are current short-term growth stimuli related to the planned structural reforms? No answer has been given.

5.  No comments at all on the future composition of the Standing Committee

It’s no real surprise but I have not heard any comment on next year’s new appointments for the Politburo Standing Committee of the Communist Party, the most important political body in the People’s Republic and, consequently, for economic policy. My own feeling is that president Xi Jinping will strengthen his position in this crucial decision-making forum after the fall of 2017.
 

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board

Back to Start Page