Economic power

This aerial photograph taken on 5 April 2024 shows tourists at a vacation resort in Huai'an, in eastern China's Jiangsu province. (AFP)

Why China's debt-ridden local governments left trillions of special bond proceeds unused

PIIE researcher Tianlei Huang explains how local governments did not make the best of the local special bond programme, a major instrument of fiscal stimulus after the pandemic in 2020. He considers if the programme needs to be downsized, and resources possibly channelled to other areas such as building human capital.
People cross a road in Beijing on 16 March 2024. (Greg Baker/AFP)

Is China falling into the middle-income trap?

While China has enjoyed decades of economic rise, it also risks losing its pace of fast growth, falling into what economists call the middle-income trap. Can China find strategic solutions to navigate its challenges and sustain its economic momentum? Chinese academic Bo Chen examines the issue.
Visitors check a Zeekr 001, a model from Geely's new premium electric vehicle (EV) brand Zeekr, at its factory in Ningbo, Zhejiang province, China, on 15 April 2021. (Yilei Sun/Reuters)

China’s overcapacity draws concern from global market

China’s production overcapacity is an issue that its officials are well aware of, and it has even drawn the criticism of the outside world, most recently US Treasury Secretary Janet Yellen. Given the fact that high-end manufacturing is facing overcapacity pressures and risks just after it has taken off, how will China mitigate the impact of overcapacity on the geopolitical landscape and its external environment?
Argentina's President Javier Milei leaves surrounded by media after delivering a speech at the World Economic Forum (WEF) meeting in Davos on 17 January 2024. (Fabrice Coffrini/AFP)

President Milei: Argentina is proof that collectivism does not work

In his recent speech at the World Economic Forum, Argentina’s President Javier Milei pointed out that collectivist experiments are never the solution to the problems afflicting the citizens of the world, but are, on the contrary, the cause. Commentator Jin Jian Guo takes a closer look at Milei’s criticisms and assertions.
China's piano industry is on the decline after more than a decade of rapid growth. (iStock)

China’s middle-class families are giving up their pianos

The poor performance of the piano industry has revealed a dying trend of learning how to play the piano in China’s middle class. No longer seen as a gateway into a higher social status, the piano has become a burden given the tough economic situation and the officials’ de-emphasis on piano talent in national examinations. Lianhe Zaobao’s China desk tells us more.
An electronic board shows Shanghai and Shenzhen stock indices at the Lujiazui financial district in Shanghai, China, 17 March 2023. (Aly Song/Reuters)

Can public opinion boost China’s economy?

Lianhe Zaobao correspondent Yang Danxu looks at the outcomes of the Central Economic Work Conference held earlier this week, in particular the call to highlight China’s economic prospects. Amid a still-struggling economy, high-level officials are pulling all the stops to boost the public’s confidence in economic recovery.
Investors look at an electronic board showing stock information at a brokerage house in Shanghai, China, on 7 March 2016. (Aly Song/Reuters)

Decline in FDI may not mean investment flight from China

While the narrative of de-risking and reshoring is popular in the media, there is little evidence that firms have left or are leaving China en masse, says China research analyst Chen Long. The decline of FDI could be due to the simple fact that China’s interest rates are now much lower than those in most developed countries, thus making more sense for some foreign firms to move their retained earnings back home. That said, alarm bells should ring in Beijing, as efforts to stabilise foreign investment have yet to succeed.
US President Joe Biden delivers remarks at the Leaders Retreat during the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco, California, US, on 17 November 2023. (Loren Elliott/Reuters)

APEC: No longer an 'economic cooperation' forum

Commentator Jin Jian Guo notes that the recent Asia-Pacific Economic Cooperation (APEC) forum was of less interest than the sideline meeting between Chinese President Xi Jinping and US President Joe Biden. 'Open regionalism', previously synonymous with APEC, seems a thing of the past.
Chinese President Xi Jinping pictured standing in front of the honour guard at the Great Hall of the People in Beijing, China, on 22 November 2023. (Florence Lo/Reuters)

President Xi's Shanghai visit: China yet to find a way out for its economy

This week, Chinese President Xi Jinping’s visit to Shanghai, China’s largest financial centre, has sent strong signals of the leadership’s emphasis on the country’s economic development. And it is clear from the itinerary the importance the higher-ups are placing on the three areas of finance, technology and livelihood. Nonetheless, Lianhe Zaobao associate editor Han Yong Hong notes more research needs to be done before the introduction of more powerful policies that can turn the tide of the sluggish economy.