China's economy soars past editorial cynics into brave new world

Editor's note: Ankit Prasad is a CGTN biz commentator. The article reflects the author's views and not necessarily those of CGTN.

'China's Economy is Obviously Soaring. The Problem is Economists.' Thus spake a Forbes article on January 22, 2025, days after the Trump inauguration. It offered a scathing counter-view to the Washington Post's 'How (not) to deal with China' op-ed that had come out a week earlier. The Post had contended that the (developed) world was worried about Chinese exports flooding its markets and that China's economy remains in the doldrums. With the benefit of hindsight, even if it's less than two months later, one could argue that one side's hypothesis hasn't aged too well, and perhaps wasn't very strong to begin with.

The main reason for the relatively quick verdict is that a lot has happened since mid-January. As the saying goes, a week is a long time in politics (and geopolitics), and seven weeks may as well be an eternity. For one, three days after the 'economy in doldrums' declaration, China revealed its economy had expanded at a 5 percent annual pace in 2024. It turned out that the fiscal stimulus the Washington Post had decried had sparked a 5.4 percent Q4 revival. Of course, the Post's 'Editorial Board', left red-faced and shorn of the chance to say 'I told you so', questioned the numbers without a single meaningful counter-statistic but plenty of innuendo.  

Fast-forward to the first half of March, an ever-growing list of remarkable developments has flipped the switch in Chinese economic discourse. Almost as collateral damage, it also renders hollow much else of what the Post's prophets of cynicism and disbelief had claimed. As of the start of China's annual Two Sessions and the submission of the government's work report to the NPC for deliberation, new buzzwords have stolen the limelight. 

The chatter in economic corridors and TV news reports is no longer of exports and manufacturing and production, which have been subsumed into the gamechanging paradigm of 'new quality productive forces'. Instead, everybody is discussing Deepseek, Ne Zha 2, Hangzhou's Six Little Dragons, Intangible Cultural Heritage-edition Chinese New Year, humanoid robots, Gazelle companies, quantum computing, sci-tech bonds and embodied AI. Few of these would have registered strongly before January, but now they're on the tips of everyone's tongues.

In his counter to the Post, Forbes commentator John Tamny had argued at a fundamental level how imports enable us to specialize to a greater extent in doing the work that most associates with our unique skills and intelligence. The idea here is that commoditized manufacturing is not an avenue for labour to show off their skills or talent. On the other hand, making a world-beating film like "Ne Zha 2" or an industry-shaking AI model like Deepseek (or writing a Washington Post takedown-piece) undoubtedly benefit from that very talent. Is that the kind of innovation the developed world would like to eschew in an effort to demonize and then compete with China or anyone else's manufacturing?

Another rather strange line of alarmism deployed against China was in the climate space. The Post article spoke in hushed and dark tones about Chinese electric vehicles and solar panels flooding Europe while simultaneously arguing later in the piece that it is essential to cooperate with China in climate change mitigation. In fact, the Post routinely writes about China's world-leading renewable energy prowess. This Dr Jekyll and Mr Hyde-esque contradiction within the space of a few paragraphs is as mystifying as it is counter-productive. In similar more recent news reported by Politico, a German government-commissioned think tank aroused speculative suspicion about Chinese windmills on data privacy grounds, leading the Global Times to equate the paranoia with Don Quixote tilting at windmills. Clearly, some economist-columnists need to decide whether they want sustainable and inclusive economic well being, or they want to go around in circles confusing everyone including and especially themselves.

Coming back to China's 2025 plan, the time for consumption has indeed come in earnest. As per Reuters, Chinese Premier Li Qiang mentioned consumption 31 times in his speech submitting the government's work report to the NPC, up from 21 times last year. To enable this, existing and new tools are to be applied, including an expansion of the trade-in-scheme via 300 billion yuan ($41.3 billion) in ultra-long-term special treasury bonds, efforts to boost household income, relaxed market access, a refined vacation system, improved duty-free shop policies, development of International consumption centre cities and strengthening of commercial infrastructure in county-level regions. As per the work report, the government will also enhance the full-caliber consumption statistics system and strengthen consumer rights protection. 

Every indication is that China's economy is in the midst of a pivot from exports, investment, construction and old-school manufacturing to innovation, new quality productive forces and consumption. Evidence suggests foundations for this pivot predate the arrival of any specific administration in the White House or, I daresay, any Washington Post editorial. From the press conference on economy on the sidelines of the NPC, it is clear China will deploy a veritable arsenal of tools to supplement this transition. Given the size of the economy this is bound to take time, but which economy isn't trying to transform these days? 

Additionally, Beijing has used the last month to send out a clear signal both domestically and internationally that it stands behind both private enterprises and foreign-invested enterprises, and also welcomes foreign investment. Meanwhile, the US appears to be intent on deploying radical and confrontational new tools for tariff negotiations that'll help it squeeze space further down the value chain, all while re-starting production of conventional engine cars and adopting a 'drill baby drill' strategy for fossil fuels. This has left its old ally Europe looking hither and tither to spark its own economy back to life. 

It's clearly a brave and ever-changing new world in 2025. In light of all this, perhaps it's time for economist-columnists to kindle some new quality humility forces, accept we're in uncharted waters, put on their thinking caps, and get back to the drawing board.