Shambaugh China essay in shambles
Updated: 2015-03-13 10:37
By Chen Weihua(China Daily)
Shambaugh asserted that China's economic elite have one foot out of the door, and they are ready to flee en masse if the system really begins to crumble. Many entrepreneurs have been investing overseas. But this should be seen as a good sign of Chinese companies increasingly integrating into the global economy. Isn't wooing foreign direct investment into the US what Obama hopes for when he speaks later this month at the Select USA Summit. It does not make sense to assume that businesspeople, whether Chinese or American, will abandon the market of 1.37 billion people. And even the number Shambaugh proposed accounts for only a fraction of a nation with nearly a fifth of humanity.
Shambaugh, who is not an economist, sounded extremely pessimistic about the Chinese economic reform. That contrasts sharply to the wide applause China's Third Plenum reform program, unveiled in November 2013, has received in the US, from both US officials and economists.
The new normal of China's economic growth is rational: China is determined to accept slower growth to move up the supply chain and achieve sustainable growth.
Shambaugh even interpreted Chinese parents sending children to study abroad as a sign of the vulnerability of the system, rather than a positive outcome of a growing middle class who can afford doing things unimaginable in the past. Would he make the same argument for India, South Korea, Saudi Arabia and Canada, which follow China as the top sources for international students in the US?
In his haste, Shambaugh even cited the crackdown on Chinese "birth tourism" in Los Angeles a week ago as a major vulnerability of the Communist Party of China. Using the same logic, he might predict the demise of Mexico when many of their citizens cross the border illegally into the US.
If Shambaugh is to be regarded a serious scholar, he has certainly not shown it in his latest article.
The writer is deputy editor of China Daily USA. firstname.lastname@example.org
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