China can continue to grow faster than the US economy, and Americans should have no illusions, says a former Treasury Department official
China has proven that its economy can continue to grow faster than the US, wrote Steven Rattner.
This is despite China’s weaker than expected recovery from COVID restrictions.
“Most importantly, we don’t indulge in the fantasy that China will collapse under its own weight.”
China has proven that its economy can continue to grow faster than the US, Steven Rattner wrote in the New York Times, warning Americans against illusions that suggest otherwise.
The former adviser to the Treasury Secretary during the Obama administration acknowledged that China’s recovery after the end of China’s tough COVID policy has fallen short of high expectations.
Indeed, new manufacturing data on Wednesday added to concerns about the Chinese economy. And earlier signs of stagnant performance led Rockefeller International’s Ruchir Sharma to call the rebound narrative a “charade.”
But Rattner said that China has grown 14% since 2020 while the US has grown 6%, and that China is expected to grow 5.2% this year, compared to 1.6% in the US.
“Although the Western press is showing increasing skepticism, I believe China will continue to thrive. And as our greatest strategic rival, it will continue to use that wealth to bolster its assertiveness on issues from the South China Sea to spy balloons and unfair trade practices,” he wrote.
Of course, China faces major challenges, Rattner added, such as the level of control the government exercises over its companies and a youth unemployment rate of 20.4%.
And trade restrictions imposed by the Trump and Biden administrations could slow China’s development of key technologies like artificial intelligence, he said.
But regardless of the hurdles China faces, the US must “put our own house in order,” Rattner wrote.
“China has proven that it can continue to grow faster than us. We need to outperform the country by boosting our growth rate through initiatives like addressing our carelessly high budget deficit and our crippling rules on building industrial plants,” he said.
The story goes on
Stimulating growth would require addressing the large US budget deficit and changing the regulations that are holding back industrial expansion, he said.
STEM workers should also be encouraged to maintain America’s technological prowess, while legislation could be implemented to attract new talent from around the world.
“Most importantly, we don’t indulge in the fantasy that China will collapse under its own weight,” Rattner concluded. “The question for America and its adversary is whether this rivalry must be destructive or whether a more prosperous, cooperative future is still possible.”
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