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Speaker 1: Hello, and welcome to Stephanomicks, the podcast that brings the

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Speaker 1: global economy to you. For a few weeks this spring,

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Speaker 1: something rather unusual happened. Were a bloomberg realized we were

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Speaker 1: actually forecasting that growth was going to be slightly higher

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Speaker 1: in the US this year than in China for the

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Speaker 1: first time since the mid nine seventies. While the numbers

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Speaker 1: have changed of it since then, growth in the US

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Speaker 1: is looking a bit slower and China slightly stronger, but

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Speaker 1: it was a reminder that China's entering a challenging new

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Speaker 1: phase in its economic development, one that's been made even

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Speaker 1: more challenging by COVID and arguably by the increasing power

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Speaker 1: of President Xi jing Ping. We're going to spend most

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Speaker 1: of today's podcast on that subject, talking to Chief economist

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Speaker 1: Tom Ulick about the deep seated weaknesses and China's system

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Speaker 1: that have come to the surface in the past two years,

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Speaker 1: and hearing from the graduates entering the Chinese labor market

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Speaker 1: who are reading Carl Marks and insisting they do not

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Speaker 1: in fact want to be capitalists. But first, they just

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Speaker 1: wanted to share with you a few minutes of a

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Speaker 1: conversation I had this week with Rachel Reeves, the Shadow

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Speaker 1: Chancellor for the UK opposition Labor Party. They might wonder

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Speaker 1: why on earth I would bother to share this with

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Speaker 1: you when all the action in the UK surely has

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Speaker 1: been in the battle to dethrone and now replace Prime

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Speaker 1: Minister Boris Johnson. But at a time of high inflation

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Speaker 1: on both sides of the Atlantic, the question of what

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Speaker 1: is a reasonable pay rise for workers, it's pretty fundamental,

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Speaker 1: and as you're here, it is not an easy one

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Speaker 1: for politicians to answer. Can I just start by asking

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Speaker 1: you what seems to be quite a sort of basic

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Speaker 1: question that only, certainly only center left party needs to

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Speaker 1: answer in the environment that we find ourselves, Which is

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Speaker 1: what's the higher priority for you? Taming inflation which hurts

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Speaker 1: households poorer households the worst, or restoring public services and

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Speaker 1: giving teachers and doctors and others a decent pay rise.

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Speaker 1: What do you think has to come first? Right now?

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Speaker 1: We've obviously got to address the cost of living crisis,

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Speaker 1: which is why since the start of the year I've

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Speaker 1: been arguing for a winfull tax to put money in

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Speaker 1: the pockets of people who are struggling with those higher bills.

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Speaker 1: And that is the immediate priority because people can't wait

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Speaker 1: for that help with their energy bills, with the rising

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Speaker 1: food prices, with the rising price of petrol to fill

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Speaker 1: up their car. But then everything else really, whether it

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Speaker 1: is better wages of public sector workers, more investments in

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Speaker 1: our public services, or improving people's living standards, it all

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Speaker 1: comes down to economic growth. When you have low growth,

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Speaker 1: it means you don't have the money to invest in

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Speaker 1: public services. You always have to raise taxes anytime you

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Speaker 1: want to do anything because you're not getting those proceeds

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Speaker 1: of growth. And so ultimately, everything you want to do,

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Speaker 1: whether it is improving our public service, is improving living standards,

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Speaker 1: or lifting all parts of the country to to to

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Speaker 1: to share in prosperity, has got to come through a

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Speaker 1: plan for growth. But growth is really important. But right now,

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Speaker 1: what would be a reasonable pay rise for teachers and

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Speaker 1: indeed ordinary workers across the country. What do you think

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Speaker 1: would be a sensible to be a responsible course for

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Speaker 1: you as chancellor to support the pay review? Bodies at

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Speaker 1: the moment are in negotiations and it wouldn't be right

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Speaker 1: whether you're in government or in opposition, to cut across

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Speaker 1: that process. And I don't intend to do so. But

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Speaker 1: the truth is you're not going to be able to

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Speaker 1: improve public services, including the wages being paid to public

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Speaker 1: service who certainly deserve a pay rise. But you're not

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Speaker 1: going to be able to get any of those things

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Speaker 1: on a sustainable basis unless you're growing the economy. And

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Speaker 1: that is the truth of it, which is why my

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Speaker 1: focus is on how we can get growth and productivity

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Speaker 1: off the floor so we can then bring in the

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Speaker 1: tax revenues to invest in the public services that you

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Speaker 1: speak about. Is coming back to this because you're you're

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Speaker 1: you're an economist, and it's quite important to sort of

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Speaker 1: work out what we think about this inflation. The higher

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Speaker 1: cost of imported food and energy has made us poorer

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Speaker 1: as a nation. It's a hit to all of our

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Speaker 1: standard of living, a permanent hit, and all you can

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Speaker 1: hope to do is at the margin, affect the short

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Speaker 1: term distribution of that hit um and certainly potentially affect

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Speaker 1: the timing of that hit, because you can you can

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Speaker 1: kick the can down the road if you like, with

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Speaker 1: with matching wage increases, but at their cost potentially of

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Speaker 1: setting off another round of inflation. Do you accept that

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Speaker 1: there's been a permanent hit to our living standards, whatever

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Speaker 1: we managed to do about growth in the next five

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Speaker 1: or six years with an amazing new plan, and what's

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Speaker 1: the responsible way to respond to that. So you're absolutely

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Speaker 1: right that this has a hit and it's up to

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Speaker 1: them governments how they respond and ensure under my plans

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Speaker 1: that it would be the lower income people who are

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Speaker 1: struggling most of the rising cost of living would get

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Speaker 1: the most help. So I think that's what you best

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Speaker 1: can do distribute distributionally. The Governor of the Bank of

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Speaker 1: England has specifically said he's he's certainly nervous about wage

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Speaker 1: it growth that's going beyond five percent and across the

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Speaker 1: economy because anything above say three and a half percent,

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Speaker 1: would clearly be inflation. What do you think he's right

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Speaker 1: in making that. Let's look at where the wage growth

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Speaker 1: is happening. So wage growth in the top one percent

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Speaker 1: is twenty times higher than wage growth for the bottom

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Speaker 1: ten percent, and four or five times higher than for

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Speaker 1: those in the middle and wage growth in the private

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Speaker 1: sector is running at something like four or five times

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Speaker 1: higher than wage growth in the public sector. So I

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Speaker 1: don't think the Bank of England have suggested this, but

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Speaker 1: I think the government would quite like to suggest this

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Speaker 1: that somehow ordinary working people and particularly those in the

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Speaker 1: public sector, are somehow responsible for this inflation shock and

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Speaker 1: and and and a sustained on as the higher inflation

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Speaker 1: is just a fallacy and the people who are getting

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Speaker 1: the biggest pay rises are those the top of the

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Speaker 1: income distribution who are at least affected by the rise

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Speaker 1: of inflation. So if restraint is needed anywhere, is his

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Speaker 1: restraint at the top. The public has been very supportive

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Speaker 1: to date of Ukraine and are very muscular support of Ukraine.

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Speaker 1: If the polls started to suggest that with another round

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Speaker 1: of massive energy price rises that the public was actually

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Speaker 1: starting to blame the war for these cost soaring prices

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Speaker 1: and was actually starting to sort of wane in its

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Speaker 1: support for Ukraine. With that effect, in any way what

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Speaker 1: you thought was the right thing to do for the

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Speaker 1: British government. I think that the biggest risk is if

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Speaker 1: Vladimir Putin thinks that his behavior and his aggression in

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Speaker 1: Ukraine and elsewhere goes unchecked. That's what happened unfortunately after

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Speaker 1: his invasion in Crimea. We can't let it happen again

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Speaker 1: because he won't stop at Ukraine. We all know that

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Speaker 1: I don't think that the the support of the British people

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Speaker 1: will buy him. I think the support given not just

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Speaker 1: by politicians but even more so the whole country for

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Speaker 1: Ukraine has been an amazing out pouring. But ultimately, and

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Speaker 1: when it comes to the sort of defense and security realities,

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Speaker 1: the most important thing is Vladimoputin knows that he can't

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Speaker 1: get away with this because of that would put us

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Speaker 1: in greater danger in the future. Okay, so I probably

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Speaker 1: do seem to have ended up with Ladimir Putin instead

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Speaker 1: of long term growth, But thank you very much, Rachel Reason.

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Speaker 1: Now we hear a lot about the struggles of jen

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Speaker 1: z in the US and Europe, young people starting out

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Speaker 1: who might struggle to have the same quality of life

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Speaker 1: as their parents. Now we don't hear so much about

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Speaker 1: the young people now entering the workforce in China. But

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Speaker 1: it turns out they are making very different early career

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Speaker 1: choices than their parents did, choices which could tell us

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Speaker 1: a lot about the future of China's economy. Here's Bloomberg's

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Speaker 1: senior China economy reporter Tom Hancock in Hong Kong. This

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Speaker 1: is a live job fair on quite show. A Chinese

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Speaker 1: video platform similar to TikTok that's generally used by young

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Speaker 1: people to share amusing short videos. What you're hearing is

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Speaker 1: a recruiter responding to job seekers in a live stream chat.

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Speaker 1: She got this key information from them, like age and gender,

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Speaker 1: and tosses back potential job opportunities based on their situation.

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Speaker 1: There are about a hundred people in the chat, and

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Speaker 1: the hiring agency told us that many of them are

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Speaker 1: students looking for jobs over the summer brick but there

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Speaker 1: are barely any matches. China's young generation is the best

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Speaker 1: educated in the country's history, and that was expected to

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Speaker 1: help them land better jobs and push China's economy to

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Speaker 1: a more innovative future. But instead, an estimated fourteen million

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Speaker 1: Chinese young people are currently jobless. Making things worse, More

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Speaker 1: than twelve million fresh graduates will flood the labor market

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Speaker 1: this year. Because of the pandemic and Beijing's hardline approach

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Speaker 1: to controlling it, China's youth jobless rate is likely to

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Speaker 1: be pushed to that's about double what it was before

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Speaker 1: the pandemic. To find out how young people are coping,

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Speaker 1: we spoke to graduate students across China. Many are anxious

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Speaker 1: about their future and are lowering their expectations. They're seeking

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Speaker 1: safety in public sector jobs rather than positions in private companies,

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Speaker 1: which are generally paid higher wages. Anyway, concerning this is

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Speaker 1: shut Chun. He's a empty two year old visual art

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Speaker 1: major who's been unsuccessfully job hunting for months. His dream

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Speaker 1: job a state owned enterprise managed by the central government

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Speaker 1: up under COVID. Jobs at many private companies are not secure.

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Speaker 1: State owned companies are much more stable in comparison. That's

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Speaker 1: what I wanted to be with them. In addition, state

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Speaker 1: owned companies also have better subsidies and benefits in terms

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Speaker 1: of housing and data expenses than private firms. Choose preference

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Speaker 1: for state owned companies is widespread. In a recent survey,

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Speaker 1: nearly forty of graduates said state owned enterprises with their

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Speaker 1: top choice. That's up from just in seen. On the

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Speaker 1: other hand, interest in private and international companies took a dive.

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Speaker 1: Only thirty percent said those are their top priority. Shape

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Speaker 1: at a T five fashion fashion meet, Kay Low a

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Speaker 1: postgraduate with a master's degree in law from ching Hwa University,

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Speaker 1: basically China's equivalent of m I T. After doing internships

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Speaker 1: at a law firm, an Internet giant, a securities brokerage,

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Speaker 1: and the court. K eventually had a change of heart.

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Speaker 1: She took an offer to work in the government. Was actually,

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Speaker 1: when I first started my graduate program, I was averse

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Speaker 1: two jobs that are quote unquote within the system. I

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Speaker 1: thought civil servants jobs were really boring and you could

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Speaker 1: almost predict what you'll be doing in the next to

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Speaker 1: five decades. But over the past or three years, I've

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Speaker 1: gone through a lot and changed a lot. The pandemic

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Speaker 1: has made everyone prioritize stability in jobs. Civil servants are

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Speaker 1: among the most stable jobs, and that's definitely one of

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Speaker 1: my considerations. China's Communist Party and President ce Jim Ping

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Speaker 1: might be relieved that unemployed youth are trying to join

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Speaker 1: the government rather than overthrow it, but she did express

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Speaker 1: his concerns at a rare appearance at a university last month.

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Speaker 1: According to state media, see caution the students that to

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Speaker 1: get rich and famous overnight is unrealistic. He asked the

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Speaker 1: students to be down to earth and to be willing

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Speaker 1: to lower their expectations. However, preference for the public sector

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Speaker 1: is not just about market forces, it's also about ideology.

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Speaker 1: Speaking of her previous internship at a law firm. Case

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Speaker 1: said the job felt meaningless because she felt she was

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Speaker 1: just quote working for some capitalists the whole. After I

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Speaker 1: read Marks, I became increasingly opposed to capitalists pursuit of wealth.

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Speaker 1: I chose to become a civil servant at the end,

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Speaker 1: because that way I will at least get a sense

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Speaker 1: of self accomplishment. I will be serving the people and

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Speaker 1: contributing to my mother land. But as a result of

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Speaker 1: this shift, competition for jobs has become a lot more fierce.

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Speaker 1: For some positions, there are as many as two hundred

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Speaker 1: applicants for a single government post. That's an acceptance rate

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Speaker 1: of zero point five. On top of all that, applicants

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Speaker 1: in general are overqualified. A study published last year found

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Speaker 1: that half of job seekers have a bachelor's degree, but

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Speaker 1: only twenty of jobs require them. But even with high unemployment,

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Speaker 1: manufacturers still say they're having trouble recruiting. Here's Lou Fung,

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Speaker 1: a professor of economics at Peaking University. A lot of

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Speaker 1: people of the in their age will go toward the

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Speaker 1: future actress, but not I think these young people would.

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Speaker 1: They have the higher education already, they just don't want

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Speaker 1: to do the acting and the manufacturing sector. The actually

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Speaker 1: they still need a lot of info eats, but the

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Speaker 1: salary they can offer enough that attractive enough. So that

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Speaker 1: is that some of deferation of the match problem. It

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Speaker 1: is it is huge in this catch. To make things worse,

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Speaker 1: China's rapid urbanization has helped to widen the mismatch in

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Speaker 1: the labor market. In the past decades, China's two d

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Speaker 1: and eighty million migrant workers acted as a shock absorber

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Speaker 1: for the economy. They returned to their homes to do

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Speaker 1: agricultural labor when the economy slowed, and came back to

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Speaker 1: the cities when the markets needed them. But now there's

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Speaker 1: a shift of attitude. Younger migrants, who are less likely

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Speaker 1: to be university educated, tend to stay put when the

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Speaker 1: economy slows because a lot of them even now erased

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Speaker 1: in the rural area. So even they don't have an

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Speaker 1: urban hospital respiration, they regarded themselves as urban people. That

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Speaker 1: means the constraints or the government has changed in a

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Speaker 1: substantial in this regard. It's more tough than the past.

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Speaker 1: Beijing knows that the state sector isn't large enough to

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Speaker 1: solve the unemployment problem. It needs private companies to start

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Speaker 1: hiring again, but the private sector will only really get

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Speaker 1: hiring if growth returns. That depends mainly on China's ability

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Speaker 1: to avoid further COVID lockdowns this year. In addition, the

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Speaker 1: private sector's confidence has been bruised by the slump in

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Speaker 1: China's real estate industry, the almost complete closure of private

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Speaker 1: tutoring businesses, and a regulatory crackdown on tech sector. It's

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Speaker 1: clear that China's unemployment problem isn't going to be solved

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Speaker 1: anytime soon. In the meantime, China's young people are lowering

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Speaker 1: their pay expectations and seeking jobs in state owned companies,

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Speaker 1: which are generally less innovative than the private sector. As

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Speaker 1: a result, there could be a negative impact on the

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Speaker 1: world's second largest economy for decades to come. In Hong Kong.

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Speaker 1: I'm Tom Hancock for Bloomberg News. So I thought that

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Speaker 1: piece gave us an opportunity to talk to our chief economist,

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Speaker 1: Tom Orlick, who spent eleven years thinking and writing about

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Speaker 1: China's economy while living in Beijing. That and the fact

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Speaker 1: that the paperback edition of his book on that subject

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Speaker 1: is just about to come out in the US. So Tom,

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Speaker 1: we can get to the book, plug and the big

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Speaker 1: economic challenges facing China in just a minute, But first

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Speaker 1: I just wanted what your reaction was to that evidence

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Speaker 1: in that piece that China's graduates are turning to Marx

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Speaker 1: but also very much to the public sector for work.

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Speaker 1: I mean, as an economist, it doesn't sound like good

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Speaker 1: news for the flexibility of the economy if they're not

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Speaker 1: wanting to go to the private sector, especially given that

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Speaker 1: the state owned enterprises can be the least productive. I

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Speaker 1: think that's right, Stephanie. Let's be clear, there's nothing wrong

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Speaker 1: with wanting to go into the public sector. Here in America.

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Speaker 1: Many of the best and brightest want to make a

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Speaker 1: career at the Treasury or the Federal Reserve or other

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Speaker 1: bits of the US government because they want to make

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Speaker 1: a contribution. I think what's troubling in the report we

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Speaker 1: just heard from Tom Hancock is that in China it's

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Speaker 1: something more than that. Right, It's not just the desire

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Speaker 1: to make a contribution, it's also the entrenched view that

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Speaker 1: the state sector in the public sector is stable and

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Speaker 1: the private sector is risky, unstable and not a good

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Speaker 1: place to build a career. And I think what that

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Speaker 1: speaks to is some of the structural costs of the

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Speaker 1: big policies which She Jinping has introduced in the last

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Speaker 1: two years. COVID zero, Well, it's easy enough to deal

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Speaker 1: with COVID zero if you're a massive state owned enterprise,

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Speaker 1: much harder to deal with an on off economy if

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Speaker 1: you're a small business, let alone a startup. And of course,

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Speaker 1: the common Prosperity agenda she's attempts to engineer a more

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Speaker 1: equal society has ended up hammering the outlook for big

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Speaker 1: private companies like Ali, Baba and ten Cents. Now, if

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Speaker 1: you put those pieces together and you listen to Tom's report,

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Speaker 1: it's clear that young people are starting to get the

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Speaker 1: message they want to go to the state sector, not

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Speaker 1: the private sector. That's bad news for China's productivity growth,

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Speaker 1: bad news for China's long term development prospects. People listening

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Speaker 1: might wonder why you'd singled out a career at the

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Speaker 1: treasury as a productive example of the state sector, and

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Speaker 1: perhaps need to know that you used to work in

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Speaker 1: the UK Treasury, and I indeed spent some time in

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Speaker 1: the U s Treasury, But that that aside, what you

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Speaker 1: just said sort of takes us back to something which

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Speaker 1: I think we have talked about before, which is when

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Speaker 1: we looked at the end of the first year of

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Speaker 1: the COVID pandemic in China looked really good. It was

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Speaker 1: the only economy that had managed to grow it's it's

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Speaker 1: strategy of of locking down the disease looked quite robust.

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Speaker 1: It now clearly looks much less clever. But how's our

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Speaker 1: view of China more broadly evolved in these two years.

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Speaker 1: So I think COVID nineteen is primarily a human tragedy,

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Speaker 1: but it is also a stress test for governance, financial

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Speaker 1: and economic systems. As you mentioned, If we looked at

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Speaker 1: China at the end of one, Chinese performance through the

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Speaker 1: COVID stress test was looking remarkably robust. From where we

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Speaker 1: are in the middle of two, the picture looks, I think,

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Speaker 1: much less positive. Or Macron has tested China's COVID zero

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Speaker 1: strategy and exposed some of the big problems there, with Shanghai,

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Speaker 1: Beijing other big Chinese cities spending big chunks of the

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Speaker 1: year under lockdown. A Chinese economy which has ground to

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Speaker 1: a halt for substantial periods of time has also revealed

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Speaker 1: some of the weaknesses which have been hiding in plain sight,

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Speaker 1: things like the real estate sector, where we've had sales

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Speaker 1: drying up, prices stagnating, and as a consequence, real estate

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Speaker 1: developers getting into huge trouble in their capacity to repay

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Speaker 1: their debts. And of course China's international standing has taken

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Speaker 1: a beating as well. I'm sure many stephonomics listeners have

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Speaker 1: seen that Pew survey which shows unfavorable views of China

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Speaker 1: rocketing up here in the United States, in Europe and

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Speaker 1: also in Asia as well. And for a country that

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Speaker 1: which does so much of its business overseas, growing by exporting,

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Speaker 1: growing by learning technologies, or if we're being less charitable,

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Speaker 1: stealing technologies from the rest of the world, that rocketing

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Speaker 1: up in unfavorable views of China, that's bad news for

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Speaker 1: long term growth as well. It often looks sort of

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Speaker 1: tempting to have very centralized control of the country, especially

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Speaker 1: if it's if most of the leavers are in the

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Speaker 1: hands of one man. Uh, it's attractive to think, oh,

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Speaker 1: you can pull leavers and you can get things done

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Speaker 1: and be effective short term, but long term we like

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Speaker 1: to think anyway, there's a an effect of lowering standards,

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Speaker 1: reducing the quality of government is that what we're is

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Speaker 1: that what we're seeing that kind of negative effect on governance.

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Speaker 1: So one of the concerns about Shijin Ping is that

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Speaker 1: he's going to break China's governance system. Dong Xiao Ping,

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Speaker 1: China's great reformer, is noted for opening up the economy,

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Speaker 1: but the other thing he did was reform China's governance

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Speaker 1: system and introduce the two term limit for leaders. That

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Speaker 1: two term limit limit was observed by Um Hujin Tao

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Speaker 1: and by jangs the men Um very likely is not

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Speaker 1: going to be observed by Hijin Ping. And the concern

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Speaker 1: that brings is that, well, if we look around the

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Speaker 1: world at countries which have a single party system and

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Speaker 1: a leader who's in charge for too long, UM, that

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Speaker 1: can come at some really really serious costs in terms

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Speaker 1: of governance quality. That's what happened in China under Chairman Mao,

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Speaker 1: That's what happened in Russia under Vladimir Putin Um. Now,

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Speaker 1: if we think about China's COVID zero strategy and the

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Speaker 1: kind of debate over when that is going to end,

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Speaker 1: the message you hear most consistently from China watches is

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Speaker 1: well COVID zero can't end until Shi Jinping has secured

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Speaker 1: his third term as President of China and General Secretary

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Speaker 1: of the Communist Party. And what that suggests to me

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Speaker 1: is that some of that dictator decline in government standards

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Speaker 1: is already with us, and a matter of huge national importance,

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Speaker 1: touching the lives of all of China's one point four

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Speaker 1: billion people, is being settled not entirely in the national interest,

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Speaker 1: but rather in the interests of sort of rather narrow

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Speaker 1: political decision. We've had years of thinking the big risk

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Speaker 1: we had to worry about with China was going to

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Speaker 1: come from the financial sector. The bubble in the property market,

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Speaker 1: debts in the bankings to them. But it sounds like

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Speaker 1: that's just a symptom potentially of a broken growth model.

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Speaker 1: Is that overstating it. I'm not sure that growth model

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Speaker 1: is broken quite yet, Stephanie. China's GDP per capita is

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Speaker 1: still around a third of the level in the United States.

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Speaker 1: And what that means is that the growth model for

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Speaker 1: China doesn't have to be around innovation. It can, for

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Speaker 1: the foreseeable future, be about learning, copying, stealing foreign technologies.

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Speaker 1: And if that's your growth model, then you don't actually

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Speaker 1: need the same kind of liberty and individual choice and

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Speaker 1: dynamism that you have when you're trying to push back

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Speaker 1: the technology frontier. So I don't think the growth model

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Speaker 1: is broken, um, but I do think that the COVID

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Speaker 1: crisis is exposing some of the cracks, some of the

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Speaker 1: cracks and governance, some of the stresses in the financial

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Speaker 1: sector and the real estate sector. And you talked about

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Speaker 1: China's sort of decline in sort of public opinion polls.

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Speaker 1: That's more than reflected I think in elite opinion in

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Speaker 1: Europe and the US. You know, every gathering that I

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Speaker 1: am in of of policy makers or foreign policy thinkers

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Speaker 1: is all the talk is of a return to a

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Speaker 1: new Cold War between the US and China, or potentially

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Speaker 1: the US and Europe and China. We had years in

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Speaker 1: the old Cold War of overestimating the strength of the

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Speaker 1: Soviet Union. Do you think we're under or overestimating China's

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Speaker 1: economic power? So, look, there are pards. There are persistent

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Speaker 1: concerns about the quality of China's economic data. In particular,

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Speaker 1: there are persistent and in my view, well founded concerns

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Speaker 1: that GDP is smooth and massaged of political purposes. And

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Speaker 1: if we stripped that out of the calculation on how

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Speaker 1: big China's economy is, and we stacked them up against

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Speaker 1: the United States, well, what it would tell us is

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Speaker 1: that China is still further behind, is still some way

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Speaker 1: behind the United States, and is catching up more slowly

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Speaker 1: than the official data suggest. So on that basis, yes,

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Speaker 1: I think there is a possibility that we are overstating

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Speaker 1: China's economic strength. At the same time, if we think

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Speaker 1: about China's longer term trajectory, we're talking about an economy

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Speaker 1: of one point four billion people, an economy where GDP

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Speaker 1: per capita is still a third of the level in

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Speaker 1: the United States, which means very substantial room to grow productivity,

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Speaker 1: not by innovating or doing anything particularly complicated or fancy,

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Speaker 1: just by absorbing the technologies which are already being used

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Speaker 1: here in the US and in Japan and in career

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Speaker 1: and in Europe. And if we think about Beijing, well,

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Speaker 1: Beijing does a bunch of stuff that we don't really like,

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Speaker 1: does a bunch of stuff we don't really like in

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Speaker 1: Hong Kong, a bunch of stuff we don't really like

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Speaker 1: in Shinjiang. But one thing they demonstrably do really really

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Speaker 1: well is developed the economy. Um, So I think the

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Speaker 1: kind of the short answer to your question is, are

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Speaker 1: we underestimating China's economic strength? Well, yes and no. The

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Speaker 1: longer answer is we might well be overestimating how big

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Speaker 1: their economy is right now, but it would be a

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Speaker 1: big mistake for us to underestimate how big they will

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Speaker 1: likely become in the next ten or twenty years. We've

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Speaker 1: run out of time. But I just had one final question,

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Speaker 1: which is where can I go for a smart and

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Speaker 1: super readable introduction to China's economic challenges and how it

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Speaker 1: may yet overcome them. Well, I'm delighted to ask that question, Stephanie.

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Speaker 1: The second edition of my book, China, The Bubble That

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Speaker 1: Never Pop is being published by Oxford University Press later

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Speaker 1: in August. Um, if you rush out and buy it immediately,

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Speaker 1: you may get it before the bubble pops and my

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Speaker 1: main conclusions are disapproved, And we should say it has

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Speaker 1: been well reviewed by many major media organizations that are

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Speaker 1: not Bloomberg. Thank you very much, Tom Marlick. So that's

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Speaker 1: it for this episode of Stephonomics. Will be back next week.

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Speaker 1: In the meantime, do please rate the show if you

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Speaker 1: like it. And check out the Bloomberg News website for

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Speaker 1: more economic news and views on the global economy. You

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Speaker 1: can also follow at economics on Twitter. This episode was

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Speaker 1: produced by Summer Saddi and Young Young. The story from

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Speaker 1: China was reported by You, Jane Lowe and Tom Hancock.

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Speaker 1: Special thanks also to Tom Warlick, Labor Party Shadow Chances,

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Speaker 1: Rachael Reeves, and the Resolution Foundation in London. Mike Sasson

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Speaker 1: is the executive producer of Stephanomics. M