China’s Economic Slowdown; It is Difficult to Manage

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It is not hard to see why managing a possible economic slowdown would be a daunting task for the Chinese government. After all, an economic downturn could affect the regime’s legitimacy since delivering a high rate of economic growth has been an important part of the government’s strategy for winning support for its policies over the past three decades. One interesting possible effect of such a downturn has to do with the mental state of the Chinese population. For me, it is Chinese people’s “optimism craze” that helps explain why decreasing economic growth could result in social instability for the whole country.

What might be referred to as the “optimism craze” is a blind belief in progress and is actually something inherited from the communist era. Such optimism could be considered the foundation of Mao’s entire utopian project, including the “Great Leap Forward” which brought disastrous consequences to the country in the 1960s.

Since the beginning of China’s Reform and Opening policy three decades ago, there has been a huge increase in Chinese living standards. Perhaps as a result, this “optimism craze,” which was somewhat discredited after Mao’s death, seems to be enjoying a modern revival thanks to China’s economic miracles.

Many Chinese seem to naïvely believe that the living standard of the next generation should represent a radical improvement over that of the current generation. Nowadays, young Chinese from rural areas are expected to make every effort to move to urban areas, as attainment of the trappings of a modern urban lifestyle is seen as an important marker of true progress in comparison to earlier generations. The goal for young people born in the cities is to lead better lives than their parents by becoming members of China’s rising middle-class: to have a large apartment, a private car, and other fashionable luxury goods. The “optimism craze” has led young Chinese to have high hopes for the future and to believe that the promise for an ever-brighter future offered by rapid economic development must come true during their lifetimes. For many in China today, no matter what tomorrow turns out to be, it must at the very least be something better than today.

What might happen, then, if and when an economic slowdown proves the emptiness of such big promises? Can you imagine the psychological disappointment and frustration which today’s Chinese youth will experience if they find that progress and improvement have virtually ceased to exist in the face of economic stagnation? In the end, it is not difficult to see that an economic downturn may produce modern China’s first “lost generation,” something which the whole nation will find difficult to manage.

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