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 Europe
- Assessing Information Ecosystems: How Governments Can Get Ahead of Hybrid ThreatsPaper
The hybrid warfare landscape is evolving rapidly, leaving policymakers without clear strategies. To better inform their work in addressing emerging challenges, governments must dig deeper into the underlying dynamics at play.
Raluca Csernatoni, Alicia Wanless
- Europe from Scratch: Visions for a New European OrderReport
As the EU confronts profound challenges, several leaders have called for fundamental reform to the union’s model—but only modest, superficial changes have resulted. What if Europe really could be reimagined from zero today: What should such a redesigned European order look like?
Richard Youngs, ed.
- From Trade Dependence to Geopolitical Leverage: The EU in an Era of Weaponized InterdependencePaper
As geopolitical rivalry weaponizes global supply chains, the EU’s true vulnerability lies in emerging-risk imports. For these goods, suppliers are growing more concentrated, substitution more difficult, and political risk is looming.
Sinan Ülgen
- European Security Strategy: In Search of a New AmbitionCommentary
The EU is putting together a new security strategy to meet today’s myriad challenges. But for any proposal to be effective, the union needs to grapple with its identity and ambitions.
Pierre Vimont
- Europe Should Not Let Nuclear Nonproliferation DieCommentary
Amid uncertainty caused by the Iran war, the global drive for nonproliferation has stalled. With Europe diplomatically marginalized and countries reassessing their nuclear options, efforts to curb the spread of nuclear weapons risk becoming irrelevant.
Jane Darby Menton
