Former Australian Prime Minister Kevin Rudd has hit back at claims that China has peaked, saying the current slowdown in the country's economy is just a temporary lull caused by Covid-19 and a decline in the country's real estate sector.
Speaking at the World Economic Forum in Davos, the former Labor politician said he believed China's peak narrative was “intellectually and analytically flawed”, as he said the “untapped potential” in the country's consumer market had the potential to drive long-term growth. .
“I have never accepted the premise that you see written in different parts of the world about the peak in China, which is that the Chinese economy somehow peaks, then slows down and then heads towards something worse,” Rudd said at a panel titled “Recharging China’s Growth.” China.”
The Chinese government on Wednesday released new data showing that the country's gross domestic product grew by 5.2% in 2023, up from rates of just 3% in 2022 due to the effects of Beijing's strict coronavirus (COVID-19) policies on the country's economy.
China's economy's 5.2% expansion represents a significant slowdown in the growth rates the country achieved in the decade prior to Covid-19, a result of downward trends that saw GDP growth decline from rates of 10.6% in 2010 to rates of 6% in 2019.
Hong Kong's Hang Seng Index (HK:HSI) fell 3.7% on Wednesday, as Japan's Nikkei 225 NIY00 fell,
The index decreased by 0.4%. See a roundup on Asian markets.
Instead, Rudd, who now serves as Australia's ambassador to the US, claimed the “unprecedented” size of the Chinese consumer market had the potential to continue to drive growth, while dismissing the recent slowdown as temporary.
“As long as the Chinese consumer has confidence in the future, the economy will continue to grow reasonably well. This is a basic fact, and remember, the size of the Chinese consumer market is unprecedented in the history of the global economy,” Rudd said.
Instead, the ambassador blamed the recent slowdown in the Chinese economy on the effects of Covid-19 and the downturn in the country's real estate market, and also acknowledged that Chinese consumers have had a “difficult time in recent years.”
They, like the rest of us, have had to endure the pandemic. “Since then, I've seen the real estate market, which represents 28% of GDP, go through unprecedented turmoil, and if you've tied up your savings in real estate investing, you're frankly in passive investment territory,” Rudd said.
