Speculators and Alarmists Unduly Exaggerate Concerns over China’s Economy

According to the preliminary estimates of the National Bureau of Statistics of China, the gross domestic product (GDP) of China increased by 6.9 percent in 2015. Nevertheless, while this rate of growth of China’s economy compares very favorably with the U.S. growth rate of 2.4 percent, alarmists have offered dire assessments of the state of China’s economy as 2016 got underway and China’s stock market took a nose dive. Some even questioned the accuracy of China’s 6.9 percent growth figure without offering any evidence to back up their skepticism. Sensationalistic Western media articles, think tank reports, and investment management analyses have appeared with attention-grabbing titles such as “The Great Fall of China” (the Economist), “The Coming Chinese Crackup” (Brookings Institute) and “Walled In: China’s Great Dilemma” (Goldman Sachs). The common thread running through such commentaries is pessimism over China’s decelerating growth trend line, which, the commentators contend, exposes deep-seated structural fault lines in China’s economy.