Contrary to what the West is saying, China's economy 'isn't finished'

Over the past six months, or perhaps longer, the mainstream media in the West have sung from a hymn sheet of unanimous pessimism pertaining to China's economy. Although China officially stated its gross domestic product (GDP) grew by 5.2 percent in 2023, the country nonetheless faced a number of challenges pertaining to an unfavorable global environment.

Because of this, reporters in the West pushed a very exaggerated narrative that China's economy was faltering, struggling, declining, you name it, and of course all blame was aptly pinned on China's leadership as you might expect. There are simply too many of these articles to list and more appear every week and largely all push this concurrent narrative, but you get the general gist of it. It thus became an assumed fact amongst observers that China is facing a crisis of sorts.

However, this narrative hasn't aged well. In the month of March, a number of economic indicators were reduced which all indicated China's economy was doing better than expected.

First, China's industrial output grew faster than anticipated. Secondly, China's official manufacturing index showed activity expanding at 50.8, beating expectations significantly, with non-manufacturing expanding at 53 (surpassing an estimate of 51) and composite purchasing managers' index (PMI) at 52. The Caixin index, which evaluates more middle and private businesses, then came in at 51.1. For reference purposes, all scores above 50 constitute growth, while any score beneath 50 indicates contraction.

The positive economic indicators strongly contradict the mainstream Western media narrative that China's economy is in difficulty. With such interpretations always ignoring the broader global economic environment, perhaps deliberately, there is no doubt that a great deal of this coverage was politically motivated with the goal of attempting to undermine confidence in China, aiming to deter economic ties and foreign investment in the country.

The conclusion which is always drawn from such stories is that it is China's policies that are solely responsible, and often presenting a China which is unwelcoming to foreign business, reclusive and paranoid. I can recall a BBC piece just last week that quoted someone saying China is "uninvestable," it is obvious what kind of message they seek to convey.

In reality, China's economy is not in fact struggling, rather it has deliberately changed the focus point of growth and its national development strategy. This has involved effectively ending the real estate boom and plunging the property sector into a managed recession in order to end the explosion of debt while simultaneously doubling down on the development of high-end manufacturing industries.

Because of this, it is true that China has deliberately opted for lower growth targets, and it seems more sustainable in the process. The end of double-digit growth figures as seen in the early 2000s down to a focus of 5-6 percent was not because China was "running out of steam" but because such an explosive "sprint" was not seen as self-sustainable.

Of course, amidst it all, we should acknowledge China has faced some challenges, too, such as geopolitical tensions and supply chain shocks owing to regional conflicts, stagnation of economies in the West and a global inflation crisis, among others, but this is far flung from the convenient narrative that the leadership has destroyed China's rise and growth through detrimental policies.

Now, as things are picking up again, we may be seeing a way out of these challenges as this new manufacturing policy comes to fruition. China's export boom in electric vehicles and solar panels is seen as evidence of this.

However, this surge in exports is also attracting growing hostility from Western countries who argue this constitutes an "unfair economic practice," with which comes the specter of "national security threat" stories in countries such as the United States.

It remains to be seen what reaction this will evince in the long run, but one thing is clear and that is China's economy "isn't finished" by any stretch. It's undergoing a transition and moreover, attempts to contain it on the technology front are also failing as an inseparable part of this. China will quite clearly succeed in becoming the world's largest exporter of high-end technology goods, thus once again this opportunistic narrative of its own economic collapse or stagnation rings hollow.

(The author, a postgraduate student of Chinese studies at Oxford University, is an English analyst on international relations. The views are his own.)