China’s Mismanaged Economy at a Critical Crossroad | Hoover Institution

Tuesday, October 24, 2023
Hoover Institution | Stanford University
Mickey Levy, chief economist for Asia and the US at Berenberg Capital Markets, and visiting scholar at the Hoover Institution, discussed “China’s Mismanaged Economy at a Critical Crossroad.”
PARTICIPANTS
Mickey Levy, John Taylor, Michael Bernstam, Justin Berrie, Patrick Biggs, Steven Blitz, Michael Bordo, Pedro Carvalho, John Cochrane, Chris Dauer, Steven Davis, Randi Dewitty, Shana Farley, Andy Filardo, Christopher Ford, James Goodby, Bob Hall, Eric Hanushek, Adele Hayutin, Robert Hetzel, Robert Hodrick, Nicholas Hope, Bob Joss, Marc Katz, Donald Koch, Evan Koenig, Jeff Lacker, David Laidler, Charles Lindsey, David Malpass, Pauline Meehan, Michael Melvin, Kana Norimoto, Robert Oster, Radek Paluszynski, Paul Peterson, Valerie Ramey, Frank Smets, Tom Stephenson, Jack Tatom, Yevgeniy Teryoshin
ISSUES DISCUSSED
Mickey Levy, chief economist for Asia and the US at Berenberg Capital Markets, and visiting scholar at the Hoover Institution, discussed “China’s Mismanaged Economy at a Critical Crossroad.”
John Taylor, the Mary and Robert Raymond Professor of Economics at Stanford University and the George P. Shultz Senior Fellow in Economics at the Hoover Institution, was the moderator.
SUMMARY OF TALK
China’s earlier opening of its economy to free enterprise and capitalism played a critical role in its extraordinary growth that lifted it from an impoverished nation to the world’s second biggest economy and the driver of global trade, but President Xi’s clamp down on free enterprise and tightening central control has generated current economic woes. This presentation describes how central planning led to the misallocation of resources that resulted in the current excesses in real estate and debt that now weigh on China’s economy. Based on earlier experiences of Japan and the U.S. with asset and real estate bubbles, unwinding China’s excesses are likely to take a while. China’s economic woes are having measurable impacts on global trade and economic performance. The presentation concludes with a brief assessment of China’s longer-run potential growth based on a simple neoclassical growth model. Under the current economic regime, the outlook for potential growth is pessimistic.
To read the paper, click the following link
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To read the slides, click the following link
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[@erickelleher3911]

Thanks for publishing these informative talks! I also love the audio quality on this one; it makes me feel like I'm listening to something from 50 years ago. Like an important talk from the Cold War era in the 50's or 60's. Except it's now...

[@birdstrikes]

Kotkin should be on every show.

[@samuelmatz]

" Basic Economics " by Thomas Sowell a must read 📚

[@garywisdom160]

Great presentation.

[@huanghermann5207]

Mismanagement has been long existing in China economy

[@gagamba9198]

China never followed US-style capitalism. It studied post-WWII Japanese and Korean models, implementing many aspects. CCP released itself from the iron rice bowl obligation (social spending) whilst retaining control in whole or in part the top businesses of most sectors such as banking, transportation, utilities, telecoms, mass media, mining, construction, petroleum, etc - about 150,000 SOEs (to include regional and local ones). It was sectors that didn't exist prior to the '90s, for example e-commerce, where an entrepreneur could make a big move, for example Alibaba. Less important to the CCP are sectors such as retail, restaurants, and some services; these allow the widest freedom to domestic entrepreneurs, but they still operate in a system where state-owned banking, utilities, and media exercise influence over them. Get out of line and you lose your financing, can't advertise, and may have problems with your electrical and water service.

[@jsfriedberg]

Why will it "..take years to unwind the excesses.."?

[@lettucesalad3560]

I'd like to hear how China's economy faltering will affect their military spending/readiness.

[@maxgluteus4263]

The Australian guy sounded right. 25:00

[@HenrikVendelbo]

Retire past 60, rofl. How can that be a benchmark. Only government employees have that sort of deal. My parents have run a business in the medical industry in Scandinavia since the 1970s. They only retired at 80! Having moved to Switzerland, I don’t expect to be able to retire before 70

[@nikhildeshmukh3709]

Sometimes the panel looks like madhatters tea party where no knows or is sure of what they are talking about maybe this is a mark of a successfull panel

[@joro8604]

Informative, a bit chaotic in delivery, fun to watch expertd puff their chests and bring down others.

[@user-jy5dc7nd7c]

China would have collasped for more than a hundred times if you just listen to what those western economist told you, but sorry dude, apparently it never happened and it won't happen as Chinese people are smart and hardworking enough to stand throught this hardship, no doubt about this at all!

[@kelvinzhang7041]

A bunch of old American academics are worried about when China's economy will collapse🙂

[@nikhildeshmukh3709]

I wonder how many of the folks on the panel have actually lived there and not in thier study rooms just analysing published documents . hmmm.

[@AhmadJaafaru]

What about US economy and the reliance on debt? The just previous debt ceiling cycle suggests the catastrophe waiting to unfold.

[@MurielStrand]

um... china is communist not socialist. also, corporations regularly practice central planning, so it must be useful and effective