Other
François Godement, Ashley J. Tellis
{
"authors": [
"François Godement"
],
"type": "legacyinthemedia",
"centerAffiliationAll": "dc",
"centers": [
"Carnegie Endowment for International Peace",
"Carnegie Russia Eurasia Center"
],
"collections": [],
"englishNewsletterAll": "asia",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie Endowment for International Peace",
"programAffiliation": "AP",
"programs": [
"Asia"
],
"projects": [],
"regions": [
"East Asia",
"China"
],
"topics": [
"Political Reform",
"Economy"
]
}
Source: Getty
In The Media
China’s Economic Downturn: The Facts Behind the Myth
Despite the faltering pace of Chinese economic growth, China is not facing a deep-rooted economic crisis, but rather a crisis of expectations on the part of Chinese and international observers alike.
Published on Oct 20, 2015
Source: European Council on Foreign Relations
In a new report for ECFR François Godement, director of ECFR’s Asia & China programme, asserts that recent economic issues in China should be seen as part of China’s transition to a service-driven economy, rather than a deep-rooted economic downturn.
The report highlights variances between different economic sectors within China, where the service sector continues to expand strongly – particularly e-commerce, with web retail sales growing 36 percent in the first three quarters of 2015. Meanwhile, declines in sectors such as steel and housing are desirable due to overproduction, and their environmental impact. Godement argues that these patterns reflect China’s long-trailed economic structural changes.Godement also asserts that ideas of China’s impact on the global economy are exaggerated, claiming that its effect is essentially “psychological”. He cites limited non-Chinese exposure to the Chinese stock market and its positive current account and trade balances as factors limiting any real contagion to the global economy.
Nevertheless, he highlights some possible effects of China’s economic changes on parts of the world economy, which do impact on Europe. Worst hit by the transition will be big exporters to China, including commodity providers like Brazil and Venezuela. For others, the effect may, in fact, turn out to be positive, as falling commodity prices help other importers and reduced price Chinese exports benefitting living standards. However, countries with high levels of indebtedness may suffer from the effects of price deflation.
For Europe, the impacts of China’s economic transition will be mixed. For Eastern Europe it will be mostly positive (lower primary prices and cheaper consumer products from China, while exports to China are not significant). The effects are negative for Germany (which is more energy efficient, and relies on China as an export market) and for southern European economies, including France, for whom price deflation may well increase their relative debt burden.
This paper was originally published by the European Council on Foreign Relations.
Read Full Text
About the Author
François Godement
Former Nonresident Senior Fellow, Asia Program
Godement, an expert on Chinese and East Asian strategic and international affairs, was a nonresident senior fellow in the Asia Program at the Carnegie Endowment for International Peace.
- Reorienting China Policy By Working With Europe
- China at the Gates: A New Power Audit of EU-China RelationsIn The Media
François Godement, Abigaël Vasselier
Recent Work
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Endowment for International Peace
- The U.S. Export-Import Bank Was Built for a Different Era. Here's How to Fix It.Commentary
Five problems—and solutions—to make it actually work as a tool of great power competition.
Afreen Akhter
- Is Frustration With Armenia’s Pashinyan Enough to Bring the Pro-Russia Opposition to Power?Commentary
It’s true that many Armenians would vote for anyone just to be rid of Pashinyan, whom they blame for the loss of Nagorno-Karabakh, but the pro-Russia opposition is unlikely to be able to channel that frustration into an electoral victory.
Mikayel Zolyan
- How to Join the EU in Three Easy StepsCommentary
Montenegro and Albania are frontrunners for EU enlargement in the Western Balkans, but they can’t just sit back and wait. To meet their 2030 accession ambitions, they must make a strong positive case.
Dimitar Bechev, Iliriana Gjoni
- Leveraging Internal Security Cooperation with Vietnam Offers a Glimpse of Future Chinese Diplomacy with Southeast AsiaArticle
Despite long-standing differences, China and Vietnam are reinforcing common ground for collaboration, especially in public security. This internal security–centered diplomacy offers a strengthened road map for how China moves forward with Southeast Asia.
Sophie Zhuang
- The Iran War’s Global ReachCollection
As the war between the United States, Israel, and Iran continues, Carnegie scholars contribute cutting-edge analysis on the events of the war and their wide-reaching implications. From the impact on Iran and its immediate neighbors to the responses from Gulf states to fuel and fertilizer shortages caused by the effective shutdown of the Strait of Hormuz, the war is reshaping Middle East alliances and creating shockwaves around the world. Carnegie experts analyze it all.
