U.S. Global Leadership and Sustainability Vis-a-Vis China’s Lagging Economy

Abstract

China experienced a high rate of growth in its gross domestic product (GDP) during the last three decades. However, the Chinese economy now is at a watershed. The once double-digit growth rate exceeding 10% is giving way to a current rate of growth estimated by leading analysts to be in the range of 3% to 5% for 2023. This slowdown in the Chinese economy is likely to be the new normal for the immediate short term and beyond. In order for China’s economy to grow, it needs to continue to export goods to the United States, Europe, and other emerging economies. Moreover, China needs to continue to attract foreign investment. These are challenges immense. Moreover, China’s youth unemployment is in the range of 21% to 30%. Additionally, China is facing an aging population along with a crisis in its shadow banking system which is sitting on significant debts that may not be collected. Furthermore, deflation is also on the horizon and consumer spending is not growing as anticipated. The return to economic growth after COVID-19 did not materialize. Thus, the Chinese government needs to reduce the obstacles for foreign multinational companies, treat foreign firms fairly, and declare the country to be open to global business. Moreover, the high level of Chinese subsidies to state-owned enterprises should decline in order for a fair and nondiscriminatory level playing field that must be seen as equitable by foreign multinational firms.