China is not doing too well economically.
This is not a message you often hear from politicians, the legacy media, or uninformed commentary on the internet.
This is not entirely unexpected to macroeconomists: high growth rates of developing countries typically are not sustainable, and China is well-known for publishing macroeconomically questionable data.
The first signs of all this started about 10 years ago.
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Anyway, Li Keqiang died suddenly this past week.
China's political structure for the last 40 years has been one with 2 guys at the top, serving for 2 five-year terms, with mandatory retirement for top officials when a term ends and they are over 65.
This is analogous to a firm being managed by a Chief Executive Officer (CEO, who has the final say on decisions), and a Chief Operating Officer (COO, who makes the day-to-day decisions). This metaphor is useful because China has been run like a business since around 1980, with a good deal of promotion by merit, leading to something like an executive suite culture, with a strong board, silos of power, and a clear path to the top.
The top two installed in 2012 were Xi Jinping and Li Keqiang.
The CPC (Chinese Communist Party) does not allow competition from other political parties, but it does have factions that are analogous to political parties in other countries. Xi and Li were from different factions. Li was seen as the continuation of the successful way of doing things, and Xi was seen as the guy from the rich and well-connected family who was getting his turn at the top.
The big story in China over the last 10 years has been that Xi has outmaneuvered or muscled out the leadership competition to make China more dictatorial than it has been since the mid-70s.
And Xi seems more interested in power than economic success. So lots of observers infer that China's macroeconomic problems start with his dictates, inattention, and lack of expertise. Li was the one who was supposed to bring the last two. Xi kept him around for most of two terms, but he was pretty much policy-neutered by 2014 or so.
Americans get Xi's interest in power. What they are not getting is that China's economy is rounding out almost a full decade of looking sickly and problematic.
There are lots of obituaries out there (look for one), but the best one is in The New York Times. Look for a free version, but this may be gated (not expecting students to pay for it). What's interesting about these is the outpouring of comments from within censored China about their loss of economic dynamism.
“He may not have been a strong and forceful politician, nor a proficient public speaker,” Mr. Shen wrote in a post on WeChat. “But in my impression, almost all his public expressions were closely related to keywords such as democracy, rule of law, market economy and government streamlining.”
Li did not believe the internal hype about China's economy:
In 2007, when he was the leader of Liaoning Province, in the northeast, Mr. Li privately acknowledged to the American ambassador to China that Beijing’s official economic statistics were “man-made” and unreliable, according to a confidential diplomatic cable ...
Anyway, he's gone, and Xi is not.
