Note

The China Dashboard: Winter 2020 Edition

Daniel H. Rosen March 11, 2020

The novel coronavirus epidemic embroiling China and slowing large swaths of its economy, likely for a prolonged period, comes on the back of two sets of policy challenges in the country: the decline of economic reform and the U.S.-China trade war. This COVID-19 outbreak relates to the just published Asia Society Policy Institute (ASPI) and the Rhodium Group winter 2020 edition of The China Dashboard: Tracking China’s Economic Reform Program in profound and complicated ways. Given that the economic system is already under great strain, aspects of reform that require near-term pain and sacrifice are off the table for now. Nevertheless, the virus is not a reason to put the reform discussion on hold, but rather a pressing cause for bolder leadership.

The Dashboard’s gauges of policy movement, analyzing data from the third quarter of 2019 in ten essential economic policy areas, collectively show a system not moving sufficiently in the direction of market efficiency to sustain medium- to long-term economic growth. Three areas saw very modest improvement over the previous quarter: competition policy, state-owned enterprise reform, and cross-border investment opening. However, fully half of the ten policy dials show backtracking quarter-on-quarter. Systemic reform has been piecemeal at best; it has not been the central thrust of the government’s economic policy efforts.