The Biases of Western Analysts Regarding the Chinese and Indian Economies: A Few Thoughts

For orthodox economists it has been bad enough that neoliberalism has had as its product not only social misery but developmental failure. Making things worse is that a nation should enjoy so much success for so long a time by way of rejecting neoliberal prescriptions, instead following a statist and mercantilist course of development that has stressed exactly the "hard" industries that finance-singing neoliberals are so prone to treat with disdain (along with those who stand up for them). That the government presiding over the progress has been run by a party still calling itself Communist (however little its actual policies may have to do with Communism), that international relations have become more hostile (indeed, even that China has become such a major producer of "green" technology of the kind the fossil fuel-worshipping right despises, such that one does not hear the right screaming against the recent tariffs on such goods in the name of their free-market pieties), has only lent a further edge to their hostility to China's gains. The result has been their endlessly predicting doom for China's growth, and even the outright collapse of the Chinese state--only to see China defying those predictions for decade after decade. Even the Great Recession, escalating trade war with the United States and its allies, and the COVID-19 pandemic, this remains the case, China's growth admittedly slowing, but still greatly superior to what the rest of the world has seen for the most part, with China's 4.7 percent a year average annual GDP growth rate in the crisis years of 2020-2023 enviable (certainly next to the U.S.' mere 2 percent, Europe's 1.1 percent, Japan's 0.3 percent over the same time frame)--and even the slowing seeming to bespeak not the failure but the maturity of an economy that by this point would seem to have surmounted any "middle income trap" to go by its high-technology exports (greater than those of the whole G-7 in the aggregate, and greater than those of the U.S. today in per capita terms).

Of course, none of this has given the doomsayers any pause, the predictions still forthcoming.

Such analysts' ceaseless doomsaying about China has had its complement in their comparative optimism about the prospects of India--which they view so much more positively because in contrast with the statist-mercantilist, manufacturing-minded Chinese model India presents a more thoroughly privatized-neoliberal, services-oriented, financialized economy of the sort they approve and champion, with India's undeniable explosion in inequality part of what they find a very welcome package. (If the term "billionaire Raj" is in many utterances a criticism of the combination of extreme wealth in a few hands with vast poverty, for such economic thinkers the country's generation of billion-dollar fortunes are India's glory.) That India is governed by a far right political party, and is seen as at least potentially a counterbalance to China (a member of the Shanghai Cooperation Organization, but also a member of the Quadrilateral Security Dialogue), only makes them more favorably disposed toward the country and the prospects of its economy.

Of course, none of this in itself means that China will not find its development stalling out, or that India will not eventually overtake China's progress (even if in the most bullish scenario this is apt to be later rather than sooner given China's very, very long lead with a GDP more than five times as big as India's, and a manufacturing value added more than ten times India's to go by the United Nations numbers). What it does mean is that anyone taking an interest in that conversation ignores those very powerful, enduring, prejudices at their peril and should look the more closely at the specifics that analysts offer in support of their claims, rather than relying on their supposed "authoritative judgment" as "experts" in the way that the mainstream media ceaselessly encourages us to do--and pay particular attention to those who refuse to conform to the prevailing "consensus." A good example of this is Michael Roberts, a longtime City of London economist who has not towed the line, least of all on China and India--and, right or wrong, given us a good deal more to think about than do the purveyors of "elitism mixed with banality" so beloved of those besotted with pompous phrases like "the adults in the room."