The Foreign Affairs Interview

Bonus: Who Killed the Chinese Economy?

Dec 7, 2023

Economists Adam Posen, Zongyuan Zoe Liu, and Michael Pettis discuss the causes of China's economic stagnation, including the lack of consumer rebound and the challenges of transitioning to a new growth model. They also explore the impact of China's foreign policy and civil-military fusion strategy, and the concept of the middle income trap on the rise and fall of the private sector.

30:18

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Episode guests

Zongyuan Zoe Liu

Michael Pettis

Adam Posen

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Podcast summary created with Snipd AI

Quick takeaways

Xi Jinping's policies on decoupling and the acceleration of existing structural problems have contributed to China's economic stagnation.

The unsustainable growth model and failure to shift to a new model are key factors in China's struggles, along with the concentration of power in an autocratic system.

Deep dives

China's Economic Slowdown and the Causes

China's economy has been struggling, with slow growth and deeper underlying issues. The causes of China's stagnation have been a topic of intense debate. Economist Zoe Lu, Michael Pettis, and Adam Pozen each have their own explanations. Zoe Lu emphasizes the impact of Xi Jinping's policies on decoupling and the acceleration of existing structural problems, while Michael Pettis focuses on the unsustainable growth model and the failure to shift to a new model. Adam Pozen highlights the shift in Chinese household behavior after the zero COVID policy, leading to a decrease in consumer spending and a turn against the private sector. The three experts have varying views on the role of external factors, highlighting the complexity of China's economic challenges.

Introduction

3min

China's Economic Slowdown and Lack of Consumer Rebound

10min

The Chinese Growth Model: Challenges and Shifts

8min

The Impact of China's Foreign Policy and Civil-Military Fusion Strategy on the Chinese Economy

4min

The Middle Income Trap and the Rise and Fall of the Private Sector

5min

There is no doubt that China’s economy is struggling. After Chinese President Xi Jinping ended the country’s zero-COVID policy a year ago, most economists expected growth to surge—but that never really happened, and deeper problems became apparent. So what are the exact causes of China’s stagnation?

The economists Adam Posen, Zongyuan Zoe Liu, and Michael Pettis each have different answers. China’s future—and the future of the United States’ policy toward China—hinges on which of their answers is the right one.

Foreign Affairs Executive Editor Justin Vogt spoke with them at a November 14 discussion co-hosted by the Peterson Institute for International Economics, of which Posen is president. Liu is the Maurice R. Greenberg fellow for China studies at the Council on Foreign Relations. Pettis is a senior fellow at the Carnegie China Center and professor of finance at Peking University.

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The Foreign Affairs Interview

Bonus: Who Killed the Chinese Economy?

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

China's Economic Slowdown and the Causes

The Role of Xi Jinping and Policy Choices

The Structural Issues and Lessons Learned

Remember Everything You Learn from Podcasts