The Bubble That Never Pops

If anything was going to get in the way of China’s rise, it was Covid-19. The country shuddered but kept going

- Tom Orlik

Don’t tell President Trump, but China is winning.

The U.S. has thousands of new Covid-19 cases a day. China’s reported daily case count is down to double digits. The U.S. is braced for a historic 6% contraction in gross domestic product. China’s rapid rebound means it’s poised for another year of growth—and a speedier catch-up in the race to overtake the U.S. as the world’s biggest economy. America’s international standing has seldom been lower. From the corridors of the World Health Organization to the protest-ridden streets of Hong Kong, China’s global clout increases.

For many, China’s world-beating rebound must come as a surprise. To read the history of China's analysis in the last 30 years is to be bombarded with predictions of imminent demise. Sure, the skeptics conceded, double-digit growth looked impressive. But, they said, just poke beneath the surface, and the reality was an unsustainable bubble. The authoritarian political system was too constricting for the economy to truly thrive. Banks were stuffed with bad loans. The industrial landscape was littered with zombie companies, the urban landscape with ghost towns.

At first, it appeared Covid-19 would confirm that narrative. Reports about a virus contracted from bats and spread in a crowded wet market confirmed prejudices about a primitive and backward people. The story of Dr. Li Wenliang—the whistleblower who tried to alert China’s authorities but had been silenced—affirmed the superiority of the open U.S. system. Footage of mechanical drones barking “go home” at lockdown dodgers added fears about the rise of a surveillance superstate.