It’s easy to forget just how astonishing China’s rise to economic dominance has been, says Rory Stewart on The Rest is Politics. When I first visited, in 1979, “everyone was still in blue Mao suits, little red books were being carried around, everybody was on bicycles”. As recently as 2005, the Chinese economy was still smaller than Britain’s. Today, it’s nearly seven times larger. Over the past three decades, China’s GDP has grown at an average of 10% a year – to put that in context, in Britain “we’re pretty pleased if we get about 2%”. China is now the world’s largest manufacturing economy, the largest exporter of goods and the fastest-growing consumer market. It produces more than half the world’s steel, and – I discovered recently – “70% of the world’s sex toys”.
But the Chinese economy is now on the wane. The property sector, which accounts for 20% of GDP, is slowly imploding. A staggering $55bn to $82bn worth of houses and apartments have been paid for but not built. Youth unemployment is rising: between a quarter and a fifth of people aged 16 to 25 don’t have a job. And the economy remains largely dependent on free trade, in a world that is becoming “more and more protectionist”. The big fear in Beijing is that China will become “another Japan”. In the 1980s, everyone thought Japan was going to take over. It was leading in technology; its companies were “buying up the world”; property prices were so high that the Royal Palace Compound in Tokyo was “worth more than the whole of Manhattan”. But then it all collapsed under the weight of its debts – and Japan “never came out of it”.