On worrying about China

It is February 2016, and I'm sitting in the Lian Luo Coffee house in Chongqing, a huge metropolis on the Yangtze River upstream from the Three Gorges Dam.

I was also sitting here in 2009 when I wrote an article questioning Western predictions that the Chinese economy was about to go under.

The same experts who had failed to predict a financial crisis in their own backyard were opining – shamelessly – that rising China was about to fall. To sink in fact.

And here we go again. The big-picture guys are predicting that China's long run of economic success is over, and that it is just a matter of time before ex-President Zhang Zemin's 'Socialism with Chinese characteristics' unravels. Spectacularly.

Given their long history of predicting doom for China, I hope that you will forgive my cynicism. It has been shaped by long experience with the Western commentariat.

I remember 2009 vividly. China was concerned about a world-wide recession, and here in Chongqing, government officials were preparing for the worst.

Rather than laying off people though, the pain was to be spread evenly – all employees would have to accept fewer working hours.

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Laid-off migrant workers were returning home and the police and other internal security agencies had been directed to be 'proactive' in nipping any 'social disorder' in the bud.

China was readying itself for an economic hard landing.

While this was going on, I noted that housing construction had stalled and that apartments were going cheap. Restaurants had fewer patrons, belts were being tightened, and there was a sense of apprehension in the air.

Then the Chinese ship of state righted itself after the $550 billion stimulus programme got things moving again.