March 14th, 2012
09:12 AM ET

Zakaria: What happens when China slows down?

By Fareed Zakaria, CNN

Hundreds of you have submitted very thoughtful questions for me through FacebookTwitter and my blog. Over the next few days, I am going to post my text and video responses to some of the most common questions and a few others that caught my eye.

I've always been bullish on China. People have often told me that China can't continue to grow like this and that the whole thing is going to come crashing down. Well, for 25 years, it hasn't come crashing down. China's had ups and downs - but mostly ups. And they have managed the downs very effectively. I continue to believe that China will manage to do that.

I think that the Chinese government has a very bizarre situation where it is being run as a pro-growth dictatorship in which technocrats run the country and they do it with long-term planning and, by and large, do it in ways that are friendly to the markets and trade. It's not replicable. When people talk about a "China model" I think, there is no model! Mostly when you have a dictatorship or you have any kind of unelected leadership, they tend to mess up the economy. The Chinese do the opposite. Why is not entirely clear.

I do believe China will be able to manage its short-term challenges. Their stimulus program was about 10 times the size of the American one in percentage terms. They are facing some excesses that have built up as a result of it, but they'll manage those.

Zakaria: Democracy in China?

The real problem is not a crash in China, which I think is unlikely. The real problem is that China is going to stop growing at 9.5% a year just because nothing goes up forever. And the world will have to get used to a China in which 6% or 6.5% growth becomes more normal. It may not happen for a few years - maybe three to five years - but certainly at that point you're going to see a much slower growth trajectory for China.

What does that do to a world that has gotten hooked on a Chinese boom? That's the question to watch.

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Topics: China • Reader Q&A

soundoff (14 Responses)
  1. 100% ETHIO

    Probably, the trade enforcement Act will have some positive aspects for US.

    March 14, 2012 at 9:50 am | Reply
  2. jal

    Military build-up.

    March 14, 2012 at 10:40 am | Reply
  3. Joseph McCarthy

    Pakistan is one prime example of a country that needs to follow the Chinese model. First, they need to break with NATO which is forcing them to continue their civil war against the Taliban, Secondly, they need to set up a Communist government and initiate economic reforms they way the Chinese did back in the 1950's.

    March 14, 2012 at 10:42 am | Reply
  4. j. von hettlingen

    China has the advantage that it can always rely on its domestic market, if exports plummet due to recession in the West. Having benefitted from years of boom household savings are high, which could come useful to boost the domestic economy.

    March 14, 2012 at 6:16 pm | Reply
  5. matt a

    What happens when the US slows down?

    March 14, 2012 at 7:25 pm | Reply
  6. tms

    What happens when the US slows down?

    March 14, 2012 at 7:28 pm | Reply
    • Amato

      What happen? More people on food lines.

      March 14, 2012 at 8:10 pm | Reply
  7. IPman

    Even if China grows at 2% a year, it's still pretty impressive performance.

    March 15, 2012 at 12:22 am | Reply
  8. Intrepid

    Emerging economies will take up the slack because of trade barriers and restrictions on the horizon.

    March 15, 2012 at 12:32 am | Reply
  9. Miriam

    Let China come to a grinding halt –bring jobs back to USA

    March 15, 2012 at 1:09 am | Reply
  10. Namgyal Chonzom

    Mr. Zakaria,
    Talking about China, what do you think of recent events in Tibet and 27 self immolations in Tibet calling for freedom and return of HH the Dalai Lama. No media reports on them and Tibet as Syria and Egypt? Is it because of China being super power even Obama don't say anything? UN has become deaf and dumb on Tibet issue because China is there in UN security council. What will happen to Tibet? Any thoughts, comments, views from you? Do you have any plans to discuss this issue on your GPS??? I wanted to post this on the facebook as you have also asked people to question.
    Thank you.

    March 16, 2012 at 12:56 am | Reply

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