The Duality of Growth and Discontent

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Shanghai exemplifies a city marked by impressive modernity, advanced infrastructure, and significant technological innovation amidst its vast population. Its rapid growth outpaces many Western nations, yet there is a palpable sense of discontent among its citizens, revealing cracks in the societal framework. Concerns arise from a declining real estate market, an increasingly unfriendly regime towards wealth accumulation, and the burdensome demands of an intense education system. The transition from high growth rates to more modest projections raises questions about the future drivers of economic expansion, indicating that while the city is dynamic and vibrant, underlying issues are causing distress and uncertainty among its inhabitants.

One of the big buzzwords over the last year or so has been "overcapacity." There's a constant line of argument that China is unfairly flooding the world with unprofitable goods and creating huge, unsustainable imbalances. Western countries, particularly the US (but also Europe), have responded by raising tariffs and engaging in domestic industrial policy in order to compete. But is the strategy sound? Are the basic premises of the problem correct? On this episode of the podcast, we speak with Columbia Professor Adam Tooze, the author of several books, as well as the popular Chartbook newsletter. He argues that the overcapacity framing is misguided, and that the US may be making a mistake putting its chips down on an industrial revival. He talks us through some of the actual weaknesses of the Chinese model, as well as its global political reverberations.

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