#182 Aisa Mauka Phir Kahan Milega?

Yabi Lali

24 min

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Global Policy Watch #1: The Many Transitions In China Global issues and their implications for India — RSJ In a few editions in the past, we have alluded to structural challenges in the Chinese economy and the window of opportunity that it presents India. I thought it would be useful to take a more comprehensive view of this.  China reported a GDP growth of 0.4 per cent in the quarter that ended in June 2022. China's National Bureau of Statistics (NBS) isn’t known for its allegiance to truth. It is safe to assume the real GDP would have shrunk in the quarter. The daft ‘zero Covid’ policy led to total lockdowns in major cities during the quarter. The government crackdown on the real estate sector has meant that investment in the sector fell sharply. These contributed to the slowdown. Two other data points are interesting to note. The unemployment rate among the youth aged between 16-24 was at an all-time high of about 20 per cent. Also, retail sales continued to be weak at about 2.7 per cent, much below the 5 per cent forecast. Domestic consumption, the great desire of Chinese policymakers, remained sluggish. The spokesperson for the NBS put up a brave face while spinning these numbers as short-term bumps on the road. He raised the possibility of global stagflation and its negative impact on China to possibly justify weak numbers in the future.  But is this slowdown just a blip in the impressive rise of China in the past three decades? I’m not sure. There are three transitions underway in China right now. It is difficult for nations to pull off any one of these in normal times. To attempt three simultaneously is ambitious. It is most likely to fail. Anyway, back to these transitions. The first transition started a few years back. This was forced on it because economics doesn’t bow to the party's diktats. China is finding it difficult to transition from a manufacturing-he

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