What is China's future? Economic decline, or the next industrial revolution?

The 24th episode of the Geopolitical Economy Hour is introduced by hosts Radika Desai and Michael Hudson, alongside the team working behind the scenes, including host Ben Norton, videographer Paul Graham, and transcriber Zack Wiser. The episode features Professor MC Dunford, Professor Emeritus of Geography at Sussex University and now at the Chinese Academy of Sciences, to discuss China's economy. The introduction sets the stage for an in-depth discussion on China's economic state after decades of rapid growth, addressing the widespread disinformation and 'fake scholarship' distorting the Western view of China's economy. The dialogue aims to debunk myths about China's economic decline, property bubbles, and technological theft, providing a clearer picture of China's economic trajectory and the Western bias in reporting.

The conversation delves into the characterisation of China's economy, discussing whether it's capitalist, socialist, or a blend of both. Professor MC Dunford describes China as a 'plan rational state' that utilizes market instruments while maintaining significant state ownership and control. The discussion contrasts the Western economic model with China's, highlighting China's national five-year plans and its approach to using the state sector to drive growth without capitulating to neoliberal economic policies. The participants argue that China's unique model, under the leadership of the Communist Party, has transformed it from one of the world's poorest countries to a major industrial power. This segment of the discussion emphasizes China's state-led growth, strategic autonomy, and the misconception of Western economists about China's need to adopt Western-style neoliberal reforms.

This segment addresses the common Western misconceptions about China's governance and economic policies. The speakers critique the portrayal of China as an authoritarian regime lacking democracy. They introduce the concept of 'whole process democracy' in China, which involves extensive consultation and pragmatism in policy making. This model is contrasted with the Western definition of democracy, which often equates to the existence of competitive elections between political parties. The discussion further explores China's approach to managing its economy, emphasizing the country's success in balancing state control with market mechanisms to drive significant economic growth and technological advancement, all while maintaining the Communist Party's legitimacy and control.

Focusing on China's economic growth, this part of the conversation examines China's GDP growth from 1980 to projections in 2028, comparing it to major Western economies. Despite a global trend of slowing growth, China's economy continues to outperform those of the G7 nations significantly. The discussion also touches on the challenges China faces, such as employment generation and urban development, while highlighting the strategic moves made by the Chinese government to address these issues. The speakers analyze the drivers behind China's sustained growth, including strategic state planning and investment in technology and education, positioning China to continue its economic ascent despite global economic instabilities.

This segment critically evaluates China's handling of the COVID-19 pandemic, contrasting its strategies with those of Western countries. The speakers highlight China's focus on preserving lives through strict lockdown measures and rapid vaccine development, which enabled the country to maintain positive economic growth during the pandemic. The discussion criticizes Western economies' approach to handling the pandemic, which often prioritized economic activities over public health, resulting in significant human and economic costs. The speakers argue that China's effective pandemic response, emphasizing public health and safety, sets a model for managing public health crises without sacrificing economic stability.

The dialogue shifts to address concerns over China's property market, particularly focusing on the rise and potential pitfalls of real estate development. The speakers analyze the trajectory of China's property prices in relation to policy changes and compare it to the housing bubble crisis in the United States and Japan. The discussion underscores the Chinese government's measures to mitigate risks associated with high levels of developer debt and speculative investment in the real estate sector. This segment emphasizes China's efforts to redirect investment towards high productivity sectors, aiming to deflate the property bubble while safeguarding the economy from a potential crisis akin to what occurred in Japan and the U.S.