China is again faced with the pre-crisis problems that were all the rage. First, how does it, and the rest of the world, cope with the demands of the 40 million odd new entrants to its middle class every year? And what if these really become a Western-style consumer class? Third, how does China sustainably manage its growth?
Pessimism is a hallmark of the post-crisis period, and it was with us for so long, we almost didn't notice. Confidence -- its polar opposite -- is one of those necessities that we take for granted. That is, until they are taken away. Without confidence, at best we cower in the shadows, coming out to carry on basic activities, and scurrying back for shelter. At worst, it causes the collapse of financial systems and the distribution of goods and services -- in a word, chaos. But this year, we regained something: hope.
China's aggressive push to "green" its economy and become the world leader in renewable energy is admired by many commentators in the West. Those admirers need to look again; after years of over-development in the face of decreasing demand, China's renewable energy market is on life support, barely kept alive by government subsidies.
How the mighty are falling. Resilience was a word used liberally to boast of the BRICS countries' staying power in the post-crisis period. Many even ascribed global-growth-engine status to these rising powerhouses. But 2013 has been a second tough year for the August group, even as OECD nations are steadily returning to growth.
We had some not so friendly news hit the wires this week regarding China. The world's largest consumer of things from the ground and largest sibling in the Asian region recorded slower-than-expected GDP growth for the second quarter: 7.6 per cent. This is the sixth straight quarter in which growth has decelerated and represents a half a per cent decline from the growth seen in Q1.