During a three-and-a-half-hour speech to mark China’s five-year congress in Beijing, President Xi Jinping laid out his vision for the nation’s future. Xi spoke at length about economic concerns troubling Chinese leaders, including problems with medical care, education, employment, and a growing income gap.
President Xi’s speech was by no means negative, though the hints of pessimism were unusual during a weeklong event designed to build confidence in the Chinese Communist Party. His opening remarks came mere weeks after rating agency Standard & Poor’s downgraded China’s credit rating because of rising debts. Chinese officials have slammed the downgrade as a “wrong decision,” but there is evidence to suggest the nation’s economy is not the powerhouse it seems.
I recently spent two weeks visiting China to attend several economic conferences. Aside from its magnificent scenery, what really struck me was the amount of development underway. Massive tower cranes dominate city skylines, and it’s not unusual to hear the clamor of construction at all hours. The country has an endless slate of infrastructure projects, including high-speed railways, bridges, and grand architecture.
It might look like a prosperous economy growing at warp speed, but these projects are not representative of genuine growth. This construction is commonly the result of cronyism in which investors, builders, and other players are “insiders” who profit from politically directed and supported clout.
Despite a flurry of construction, many of these structures are notably desolate. When you stroll through China’s large cities at night, dark skyscrapers tower over the metropolis, with nary a twinkling light from employees working late into the evening. Entire residential areas sit lifeless and lightless, casting an eerie vibe over a seemingly booming city.
