On 15 November, Dr Derek Scissors, Research Fellow for Asia Economic Policy, The Heritage Foundation, was invited to share insights on the expansion of the state in China under the leadership of President Hu Jintao since 2003 and the subsequent weakening in the outlook for long-term prosperity.
Recently, the Chinese economy has edged past Japan to become the world’s second largest economy. Most economists believe China will replace the US as the world’s biggest by 2030. However, Dr Scissors pointed out that the headline GDP number exaggerates Chinese people’s prosperity levels. He said that the flawed economic structure in China, where individuals subsidise large state-owned enterprises, has fed an extraordinary imbalance. Unlike Deng Xiaoping’s leadership, the current government is not committed to market reform but to state-led growth. Dr Scissors warned that if China continues to head in the wrong direction, its economy is likely to collapse like the economic bubble burst in Japan two decades ago.
At The Heritage Foundation, Dr Derek Scissors focuses his research on the Chinese economy and broad Asian economic trends, as well as related challenges facing the US. He also teaches about the Chinese economy at George Washington University as an adjunct professor. Before joining The Heritage Foundation, Dr Scissors was a China economist at Intelligence Research, a global political risk assessment firm.