A European industrialist, an American economist, and a Chinese financial expert have expressed their concerns about the economic situation in China, the world's second-largest economy.
In a report published by the French newspaper Le Monde, writer Frédéric Lemaitre explains that when three of the world's leading economic experts warn that China is at an impasse, it is important to heed their advice, 'even if your name is Xi Jinping and you are the head of a country of 1.4 billion people.
A deep crisis
Weijian Shan, a Chinese financial expert, was born in 1954 and left his country for the United States after Mao's death.
Wijian has worked for the World Bank, JP Morgan, and the TPG investment fund and now runs PAG Investment Management, a Hong Kong-based investment fund with over $50 billion in capital.
The author notes that this former Lenovo official, who was recently appointed to Alibaba, embodies China's openness to the world.
In a video for his clients, Weijian Shan warned that China is currently going through a "deep economic crisis" similar to the one the West experienced in 2008. "The Chinese economy has never been in such a bad situation in the last 30 years," he said.
Despite his confidence in the long-term growth of the Chinese economy, Weijian Shan warned against financial investment in the country.
Poor economic policy
The second expert is Stephen Roach, former head of Morgan Stanley's Asia office, who has made a lot of money in China. And when Chinese propaganda needed American support in the era of former US President Donald Trump, he was often contacted about it.
And on Thursday, April 28, at the same time that the Financial Times published Weijian Shan's comments, the economist gave an interview to the SupChina website in which he said that China's main problems, such as its "zero pact" policy, its proximity to Russia, and the pace of technology development, "point to a rigorous decision-making process that is unable to acknowledge its mistakes and lacks the flexibility to adopt a different strategy," according to a report in Le Monde.
The third critical voice is that of German Jörg Woke, president of the European Chamber of Commerce in China, who is also president of the Chinese subsidiary of the German chemical firm BASF.
In an interview published by the Swiss newspaper The Market on 28 April, Woke warned that 'growth in 2022 will not reach 5.5% as expected, but will be below 4%. Given its zero-Covid policy, China is losing credibility as the world's best source of supply.
According to a report in Le Monde Vote, he said the current economic and health policies are bad, pointing out that China "has not escaped the straitjacket the president has put it in, and that its leaders are prisoners of their narrative. I think that's tragic.
A German expert who has lived in China for 25 years believes that 'if China is on the wrong track, the technocrats will take over and put the country back on the right track. But since Xi Jinping changed the constitution in 2018 to allow him to remain president for life, no control mechanisms are in place and criticism goes unheard, the report said.
Chinese factory activity is declining
On the other hand, Reuters reported that there was a more significant drop in factory activity in China in April this year as widespread closures imposed as part of the fight against Covid-19 halted industrial production and disrupted supply chains, sparking fears of a sharp slowdown in the country's economy. The second quarter is affecting global growth.
The National Bureau of Statistics said the official manufacturing purchasing managers' index fell to 47.4 points in April from 49.5 in March, down for the second straight month and the lowest level since February 2020.
With hundreds of millions of people staying at home, consumption is falling, leading other analysts to cut growth forecasts for the world's second-largest economy.