China’s New Growth Strategy Needs a Reality Check

While the world is rightly waking up to the implications of China’s rising technological prowess, it’s time for a reality check. Reorientation toward an innovation-driven, security-focused growth model has not yet paid off, at least not economically.

Fresh analysis of official data by the Rhodium Group, a research firm, offers a granular look at the current growth trajectory, revealing something alarming but not entirely surprising. The so-called “new quality productive forces” — a term popularized by President Xi Jinping to describe high-tech industries such as electric vehicles, artificial intelligence, and robotics — aren’t pulling their weight. Their contribution to economic activity is dwarfed by traditional engines such as property and infrastructure investment, years after they collapsed.