Confidence on China voiced

Flawed views on country's private sector put to rest at economic forum

An economist and an entrepreneur in the United States say they have confidence in the Chinese economy in the long run and that misunderstandings in the US about China's private sector won't be a drag on the country's economy.

The optimization of COVID-19 measures "is going to be a significant positive for consumption in the months ahead. They (Chinese consumers) are sitting on a bunch of savings, so consumption is going to come back strongly from around the end of the first quarter and heading into the rest of the year," said Tom Orlik, chief economist for Bloomberg Economics.

"There's still reason for optimism about the Chinese consumer story relative to the rest of the world," Orlik said at a recent webinar hosted by the Asia Society Northern California that looked at the Chinese economy for 2023.

In Washington and on Wall Street, there are concerns that China's "regulatory crackdown on entrepreneurs" threatens the dynamism of the private sector, said Orlik, but they "get the common prosperity agenda wrong".

Like policymakers in the US and Europe, China's policymakers face a similar set of social and economic problems, such as inequality, low fertility rates and tech companies running riot, he said, adding that it's "regulators doing their job".

"Here in the US, we tend to frame the relationship between the state and the private sector in China in terms of conflict," said Orlik.

The last 20 years isn't the story of the state advancing and the private sector retreating, but the story of "the emergence of a bunch of really dynamic, really innovative and in many cases, world-beating private-sector Chinese firms", he said.

"I don't think that's the right way of thinking about the success of all of the entrepreneurs in Guangdong and Zhejiang following China's entry into the WTO (World Trade Organization)," said Orlik.

"They had entrepreneurial endeavor, but who built their factories, who ensured they had reliable access to power, who built their telecommunication systems? It was all State-owned companies."

Entrepreneurial success

The example of entrepreneurial success in China is an example of successful collaboration at the macro level between the State sector and the private sector, he added.

Jacob Rothman, founder and co-CEO of Velong Enterprises, echoed Orlik's comments by telling of his experience running factories in China. He went to China in 2006 and established a design-focused trading company in Shanghai. Then he merged his company with Velong in Yangjiang, Guangdong province.

He said he started with "a dirty floor factory" in China almost 20 years ago and now his company has become a major manufacturer of grilling and kitchen tools.

"I don't have anything but gratitude and respect for a government that's managed the longest economic advancement in almost the history of the world," said Rothman. "From my point of view, there's no crackdown. Things are fine for the private sector in the manufacturing field."

When asked about his biggest worries, Rothman said his problems or challenges started during the presidency of Donald Trump.

He said it's necessary to have frank discussions with partners and competitors, but the approach of the US government has led to hostility toward and attacks on China.

"We need to return to a time where we can have frank, open, respectful conversations and allow for China to develop as an equal partner in the world."