China’s “Beijing Consensus” Faces Challenges as Economy Slows Down
September 10, 2023 – China’s economy, once seen as a potential rival to the United States, is facing significant challenges as its growth slows down. Antara Haldar, a professor at the University of Cambridge, recently declared that the “Beijing Consensus” has died, signaling the need for emerging countries to learn from it. In an article published in Social Europe, Haldar highlighted the recent struggles faced by China, including heavy debt, skyrocketing youth unemployment, and declining consumer confidence.
China’s economic success in the past has been attributed to its adherence to the “Beijing Consensus” – a development model that deviates from the “Washington Consensus” of democratic governance and free markets. Under this model, China experienced rapid economic growth, lifting 800 million people out of poverty and investing in massive infrastructure projects. This led many developing countries to follow Beijing’s lead.
However, under the administration of President Xi Jinping, the “Beijing Consensus” has lost its shine. Stringent government policies, such as the zero-clearance policy, have disrupted the global supply chain and resulted in a decline in exports. Moreover, China is grappling with heavy debt, record youth unemployment, and a housing sector in turmoil. Additionally, major economies are shifting their supply chains away from China, further dimming the country’s prospects.
Haldar argues that China’s previous successes were not due to its unique development model but rather its adherence to the “Wall Street Consensus.” China’s role as the “world‘s factory” allowed it to leverage cheap labor and become a low-cost production base for foreign companies. However, this dynamic is changing, and China is now integrated into the global production network as a manufacturing and assembly hub, relying on products invented and designed by developed countries.
Furthermore, Haldar asserts that the “Beijing Consensus” is, in reality, a modified version of the “Washington Consensus” with more domestic intervention and less external preaching. China’s growth miracle has also exacerbated rising inequality, a broken welfare system, and harsh working conditions, leading to environmental damage.
As China’s economy faces challenges, Haldar calls on developing countries to learn from this situation and rethink their development paths. She emphasizes the need for sustainable and equitable economic paradigms that go beyond solely manufacturing low-cost goods for developed countries. Developing countries should focus on leveraging their own resources and conditions instead of merely putting their country’s name on the label of products.
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The “Beijing Consensus” may have lost its luster, but there are lessons to be learned. China’s economic challenges provide an opportunity for developing countries to reassess their development paths and strive for sustainable and equitable growth.
Editor in charge: Wang Jun
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