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The news is full of headlines about ‘China’s economic collapse’ — ignore them

Originally published: Morning Star Online on August 2023 (more by Morning Star Online)  |

IN THE last four years, covering the period of the Covid pandemic, China’s economy has grown two-and-a-half times as fast as the U.S., 15 times as fast as France, 23 times as fast as Japan, 45 times as fast as Germany, and 480 times as fast as Britain.

To add in smaller G7 countries, China has grown four times as fast as Canada, and 11 times as fast as Italy.

China’s outperformance of advanced capitalist countries is even greater in per capita terms–a still better measure of productivity changes and potential for increasing living standards.

China’s per capita GDP grew three times as fast as the U.S., five times as fast as Italy, 44 times as fast as Japan or France, and 260 times as fast as Britain–while per capita GDP fell in Germany and Canada.

China’s outperformance of developing capitalist countries shows the same pattern–China’s per capita 4.4 per cent GDP annual average growth compares to 2.6 per cent in India, 1.3 per cent in Brazil, or 0.9 per cent in South Africa.

What is important about such economic growth, of course, is not abstract statistics but its meaning for the real lives of ordinary people.

The International Labour Organisation data on real, inflation-adjusted, wages shows that up to the latest available data–for most countries to 2022, and for India to 2021–China’s annual real wage growth was 4.7 per cent.

For Britain it was 0.1 per cent, for the U.S. it was 0.3 per cent, in France it was minus 0.4 per cent, in Germany minus 0.7 per cent and in India minus 1.3 per cent.

Given this enormous economic outperformance by China of capitalist countries, any rational discussion that should be taking place in Western mainstream media about the international economic situation would be, “why is China’s economy hugely outperforming the U.S. and the rest of the capitalist West?” and,

what lessons are to be learned from China’s socialist economy that is so outperforming the West?

For the left, the issue that needs to be assessed and publicised is,

Why are real wages rising 18 times as fast in China as in the U.S., 44 times as fast as in Britain, while in France, Germany or India real wages are falling?

Indeed, the present author would argue that much greater stress should be placed on the latter point. The international left has begun to absorb that China has lifted more than 850 million people out of World Bank-defined poverty in 40 years–by far the greatest poverty reduction achievement in human history.

But it has not yet internalised how rapidly not only the poorest but average living standards are rising in China–far faster than in any Western country.

But, of course, this real economic situation can’t be discussed in the mainstream media, because its conclusions would be too damaging for the capitalist West.

Instead, a type of mad discussion is unfolding, with U.S. claims about China’s economy becoming increasingly bizarre–one might say deranged–as they get further and further out of touch with reality.

President Joe Biden, for example, recently made a speech claiming China’s economic growth rate is “around 2 per cent,” when it was 5.5 per cent in the first half of this year and, as already noted, China’s economy is growing two-and-a-half times as fast as the U.S.

Biden bizarrely claimed that in China “the number of people who are of retirement age is larger than the number of people of working age”–entirely false, and inaccurate by a figure of many hundreds of millions of people.

Discussion in the U.S. financial media equally refuses to face real facts. Because I am an economist, every morning, after the overall news, I switch on Bloomberg TV to catch up on the latest economic data. Discussion there is like Alice Through the Looking Glass–the book the principle of which is that everything is reversed compared to the real world.

Apparently, according to Bloomberg’s analysis, China’s annual average of 4.5 per cent a year growth in the last four years is an economy in severe crisis, whereas the US’s 1.8 per cent is allegedly strong growth–not to speak of Britain’s 0.1 per cent. Similar rhetoric, out of all contact with factual reality, pervades the Financial Times, The Economist, or the Wall Street Journal.

The left is well used to such U.S. political lying–the completely fake claim that North Vietnamese ships attacked U.S. naval vessels on August 4 1964 in the Gulf of Tonkin, used to launch the Vietnam war, or the equally untrue claim that Iraq had weapons of mass destruction to justify the U.S. invasion, were classic examples.

Today, the U.S. systematically lies about the state of China and its own economy because it is crucial for U.S. capitalism to prevent its own citizens, and close allies, from understanding the real economic trends.

It is further proof, if one were needed, of the truth that if the real world and a theory do not coincide only one of two things can be done. One is to abandon the theory, the other is to abandon the real world.

In this case, the theory is that the U.S., because it is capitalist, should outperform socialist China. The real world is actual economic performance–in which China continues to outperform the U.S. and other capitalist countries by an enormous margin.

Unable to abandon its theory the U.S. is therefore forced to abandon the real world–hence the demented denial of comparative economic performance noted at the beginning of this article.

While the left should expect lies from capitalism what is rather shameful is that some sections of the left repeat such nonsense–apparently believing that if they put in a few left phrases into an analysis taken from the Western press this constitutes “socialist” commentary.

For example, an article in the New Left Review’s Sidecar called China a “zombie economy.” Some “zombie” when China’s economy is growing anywhere between two-and-a-half times and 480 times as fast as any major capitalist economy.

The real data shows the reality is simple. China has far outgrown any Western capitalist economy for more than 40 years. It continues to do so.

The result in China is by far the world’s most rapid rise in living standards–not only for the poorest but for the whole average population. It is known as the practical advantage of socialism. It is fact. We know why the U.S. has to make up big lies about it. There is no justification for sections of the left echoing them.

Monthly Review does not necessarily adhere to all of the views conveyed in articles republished at MR Online. Our goal is to share a variety of left perspectives that we think our readers will find interesting or useful. —Eds.