Experts say it’s time to view China’s economy through the lens of survival rather than growth.
After announcing an injection of about 2 trillion yuan ($283 billion) into China’s ailing economy in late September, Beijing has kept the world waiting for a significant spending package as a follow-up to the huge monetary stimulus.
However, at high-profile press conferences on Oct. 8 and Oct. 12, senior leaders discussed an upcoming fiscal stimulus extensively, but stopped short of specifying details.
As the market anticipated an accompanying fiscal policy to stimulate spending, experts pondered the necessary scale.
Prominent economists in China, including Jia Kang, dean of China Academy of New Supply-side Economics and a former Ministry of Finance official, and Liu Shijin, a former senior State Council official, told Chinese media the number would need to be 10 trillion yuan ($1.42 trillion), or about 8 percent of China’s 2023 gross domestic product (GDP).
On Oct. 11, Yu Yongding, a prominent Chinese economist involved in policymaking, said Chinese institutions have floated various amounts to achieve the 5 percent growth target, ranging from 8 trillion to over 10 trillion yuan. Yu’s own estimate is over 10 trillion.
Daniel Rosen, founding partner of Rhodium Group, a leading research firm on the Chinese economy, explained the needed stimulus size further at a think tank event in Washington on Oct. 9.
If China needs a stimulus of over 6 trillion yuan to meet the growth target, “that means they are growing zero percent this year,” he said.
Some experts have gone further. They say it’s time to view China’s economy through the lens of survival rather than growth.
“The Chinese economy is not seeking growth anymore; it’s seeking survival. Therefore, stop looking at it the old way: ‘The growth rate used to be 10 percent, then 8, and now 5,’” Mike Sun, a U.S.-based businessman with decades of experience advising foreign investors and traders in China, told The Epoch Times.
“That’s meaningless, not to mention that China’s numbers are falsified.” Sun uses an alias to protect himself from retaliation from the Chinese Communist Party (CCP).
By Terri Wu
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