Bad news for the second largest economy.
China Can't Even Make Socialism Work
The currency cacophony of criticism currently being directed at Big Tech might be less vigorous if their dauting dominance didn’t seem so durable. What upstart could ever usurp the ultimate search engine, retailer, social media company, or smartphone maker? Of course, history strongly suggests Google, Amazon, Facebook, and Apple will eventually face tough competitive threats. Indeed, they already are — and not just from each other.
And perhaps the same perception is driving the escalating American concern about China. To some here, China it might appear to be an unstoppable supereconomy that will soon eclipse America. (What better captures the zeitgeist — still! — than that 2010 “Chinese Professor” ad.) Even worse, China’s appears to be doing it by fiat. Beijing’s brainy central planners merely have to direct investment into a particular sector to create a powerful competitor. Or so it might seem.
The Wall Street Journal’s Greg Ip provides a needed corrective to this view. In a new column, Ip observes that “the country’s state-led growth model is running out of gas. … Absent a change in direction, China may never become rich.” Not only has growth slowed, but alternative data such as nighttime light and tax collections suggest even that reduced rate might be significantly overstated.