What Is Xi's 'New Normal' Chinese Economy?

A technology and manufacturing facility in Shenzhen, China Photographer: Brent Lewin/Bloomberg

China’s Communist Party leaders are known for their turgid jargon, much of it dating back decades to when Mao Zedong still dominated dogma. But sometimes, apparently, they feel the need to borrow from less hoary, more capitalistic sources.

That is what Xi Jinping has done with his “new normal” theory of the Chinese economy, now getting lots of play in the state media. The phrase, first popularized by Pacific Investment Management Co., or Pimco, the giant Newport Beach (Calif) bond fund manager, referred of course to the lackluster economic growth following the global financial crisis.

Earlier this year Xi used the then-already tired cliché while on a May inspection trip to Henan, the province southwest of the Chinese capital. Then it got a real airing during a speech he gave at the Asia-Pacific Economic Cooperation Forum last month. “A new normal of China’s economy has emerged with several notable features,” Xi said, speaking before more than 1,500 global business executives in Beijing, reported the Party-owned Global Times on Nov. 10.

“First, the economy has shifted gear from the previous high speed to a medium-to-high-speed growth. Second, the economic structure is constantly improved and upgraded. Third, the economy is increasingly driven by innovation instead of input and investment,” the paper wrote, paraphrasing Xi.

Translation: Yes, the economy will not grow at the hyper rates all of you had gotten used to—still, no need for alarm. We are making the transition to a healthier, more sustainable version, this one driven more by consumption, services, and, oh yes, innovation. “The ‘new normal’ theory elaborated by Chinese President Xi Jinping would be one of the hallmarks to be engraved in history,” the Global Times ambitiously predicted.

“We must understand the new normal, adjust to the new normal, and develop under the new normal—coming to terms with the new normal will be the ‘main logic’ for economic growth for some time,” the official Xinhua News Agency wrote today, in a report on the three-day, high-level Central Economic Work Conference that closed Thursday. “The new normal has not changed the strategic importance of a period that will see great achievements,” it promised.

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