China’s Economy over the Last Ten Years

– Gordon Chang predicted in The Coming Collapse of China in 2002: “A half-decade ago the leaders of the People’s Republic of China had real choices. Today they do not. They have no exit. They have run out of time.” Chang, obviously, was way off the mark.

– When the international financial crisis erupted, Michael Pettis of Beijing University in 2009 said: “I continue to stand by my comment last year... that the U.S. would be the first major economy out of the crisis and China one of the last.” In reality, in the four years since the crisis began China’s economy has grown by 40 percent and the U.S. economy by one percent.

Such statements – and many more examples could be given – are not calculation errors in the prediction of economic details. Predictions are never accurate, and we can be never sure of future data until we see it. The errors made in these publications’ analyses are so massive that they got the entire trajectory of China’s economy wrong. To predict “sputtering,” “crisis” or “collapse” when China experienced the most rapid per capita economic growth of a major country in human history would, if rational standards of debate were abided by, lead to the producers of such analyses no longer being taken seriously. Surely it’s strange that Gordon Chang continues to be employed as a “China expert” by Forbes and Michael Pettis is still printed in the Financial Times predicting three percent growth in China. Given their failures to correctly predict anything in China over the last decade surely undermines their credibility.

Do China’s extraordinary economic growth figures mean that it faces no problems? Of course not. But the fact that problems exist – as they do in any economy – doesn’t mean we should ignore the country’s impressive achievements. It’s worth reiterating the fact that no other major country in human history has ever experienced such rapid per capita economic growth as China in the last 10 years. And this growth as translated into the most rapid rise in consumption ever recorded. Surely, these are truly awesome economic facts.