At this year’s 11th Annual Summit, CSOFT was privileged to host Bill Powell of Newsweek. He joined us to speak about his experiences regarding global economies, as well as offering his expertise and views on recent economic trends in China.
“I would like to be on balance a bubbling cauldron of optimism about the world, about the global economy. I’d love to talk about disruptive technologies and the positives of the sharing economy. But alas, I’m a journalist,” Powell opened. He went on to share that his career has managed to follow a particular trend that he cannot seem to explain. Having spent time in many countries, Powell noticed that each country he has spent time in has faced some sort of economic or political downturn during his time there.
Powell moved to Japan at a time when it seemed to be taking over the world economically. In the United States, politicians were terrified that Japan had figured out how to grow economically both domestically and internationally. When he left Japan, however, the country was in an economic slump that it has not recovered from until today.
Next, Powell traveled to Berlin, “a country that people once thought would be the economic powerhouse of Europe.” Following his move to Berlin (which coincided with the re-unification), a series of economic decisions were made which resulted in a dramatic downturn of the German economy. Unemployment rates reached double digits, growth slowed dramatically and Western Germans began to resent the sacrifices that they had to make in the process of integrating the east into its country. After two years in Berlin, Powell moved to Russia. During his time there, the country defaulted on its debt, devalued its currency, fell into “basic lawlessness and anarchy.”
The only country that has stood out as an exception to the “curse of pig pen,” as Powell calls it, is China.
Powell originally moved to China in 2001 in time to write an article about China’s acceptance into the World Trade Organization. This event reinforced the positive trends and economic reforms that were in place. Growth accelerated, foreign direct investment rocketed and people were lifted out of poverty.
However sad the state of the world’s economies, Powell noted that he always returned to his now home, China, with a sense of optimism and hope. China, he claims, has always held a palpable sense of forward motion and progress which persisted until just recently when the Chinese stock market crashed.
Powell maintains, however, that the Chinese economy, despite the “mini-panic” which ensued, is going strong. Although there is a sense of uncertainty that has never existed in China before, Powell points out that the economic change is reflective of China’s transition from an investment and export economy into a consumer economy. This transition, he says, necessitates a significant slowdown in growth which will lead to a more healthy economy long term.
As long as the current trends stay in place, Powell believes that “China can withstand what, by its standards is a recession, or a period of slow growth.”
“The Chinese people have created so much wealth and contain so much ambition and this remains unchanged.” Powell says. He is certain that, despite the changing economy, China will remain the exception to his “curse of pig pen” and that the economy will once again begin to thrive.