But, it has been a rough ride for the Chinese economy of late and the doubters are coming back. It has not helped that policy efforts to re-energise the sluggish economy have not been convincing to either financial markets or to China’s own consumers. The decline in China’s population is unfolding faster than expected and some see China struggling through a Japan-style deflationary trap for many years.
When the argument about “peak China” first emerged a few years ago, most scholars were quick to rebut the notion that China’s rise had reached a plateau. These observers dismissed the argument that China’s difficulties would prevent it from ever catching up with or overtaking the US.
They pointed to China’s many strengths such as its government’s long-term planning and resource mobilisation capacity, its growing technological prowess and its extraordinary economic competitiveness.
