Five Keywords for China’s Economy

I am an avid student of Mandarin. When in China, I often find myself translating or listening to conversations at formal meetings and round-table banquets. As a result, my ears are especially sensitive to frequently used key words or catch phrases – especially those that relate to government policy and high-profile initiatives. These words tend to be absorbed and echoed by local officials and business leaders across the country.

Here’s a quick rundown of five key phrases that permeated the economic chatter of China when I visited in May of last year. As a group, they provide a useful starting point for understanding China’s current economic slowdown and various government responses.

1. 大众创业，万众创新! (Pinyin: dazhongchuangye, wanzhongchuangxin!) “Everybody’s an entrepreneur! Let the masses innovate!” There’s no perfect way to translate Li Keqiang’s call for mass entrepreneurship, but the slogan resonates with many young Chinese graduates. In Beijing, you can find them in start-ups working out of the city’s innovation parks, which provide a campus-like setting for entrepreneurs to seek advice, meet potential investors, and find assistance with tasks like applying for registrations and permits. The Premier thinks this new wave of entrepreneurship will carry China into the future. But just how soon China’s young graduates will find a strong job market worthy of their academic achievement remains to be seen.

2. 一带一路 (Pinyin: yidai yilu) “One Belt, One Road.” While Premier Li Keqiang has led the campaign for entrepreneurship, the “One Belt, One Road” initiative is associated with President Xi Jinping’s agenda. One Belt, One Road seeks greater transboundary connections, specifically for a “Silk Road Economic Belt” with Central Asia and a “New Maritime Silk Road” with Southeast Asia. China hopes to see several outcomes from this policy, including development of poorer parts of the country and an outlet for domestic industries with overcapacity. “One Belt, One Road” highlights how China’s economic future is intertwined with the rest of the world. In this period of economic slowdown, while much of the world still looks to China as an engine of growth, China is looking outward for new opportunity.

3. 京津冀一体化 (Pinyin: jingjinji yitihua) “Integrate Beijing, Tianjin, and Hebei.” This phrase signals China’s intent to create a more productive, interconnected capital region. President Xi believes Beijing’s physical growth is excessive, unbecoming of the Chinese capital, and that some of its economic pull should be redirected to other points within a better integrated regional economy. It’s a tall order, given the current state: a 40-minute high-speed train can bring you to the city of Cangzhou in Hebei Province, but you might as well be half a country away. The Cangzhou government has implemented a package of planning projects typical in cities throughout China: It has cleared villages to make room for grand, paved plazas; a spacious planning exhibition hall; a new city museum where a foreign tour group’s visit is a local media event; and wide new boulevards framing an economic development zone with plenty of land awaiting industrial occupants.

4. 去库存 (Pinyin: qu kucun) “Getting rid of the stock.” Although I didn’t pick up on it until after my May 2015 trip to China, this word can be found all over news stories about China’s real estate market, as many cities struggle with an oversupply of housing. It’s an odd problem for a country still in the midst of massive urbanization. But in reality, China’s urban building boom has been a poor fit for the actual housing needs of low-income newcomers to the cities. While prosperous outlier cities like Beijing and Shanghai have housing markets with strong demand and rising prices, other cities across China are taking measures to move new housing off the proverbial shelves.

5. 反腐败 (Pinyin: fan fubai). “Anti-corruption.” This three-character word is often used as shorthand for the campaign against corruption launched by Xi Jinping. Controversy surrounds this campaign, and many question whether its intent is truly to improve government behavior and transparency, or rather to consolidate presidential power. Regardless of the overall impact on governance, the building boom that helped fuel high growth rates until recently has been affected, at least in part, by officials uneasy about the prospect of being targeted for investigation. This has curtailed some of the wining and dining between local officials and real estate developers that in the past would have led to lucrative but contentious land development deals.

These five phrases capture a range of policy responses to China’s current economic situation, as the country adjusts to the “new normal” of growth in the 6-7% range. China is still figuring out how to urbanize not just through empty highrises, but in a way that spreads benefits beyond its largest, richest cities.

As the central government calls for more entrepreneurial innovation, smarter urbanization, and greater international connectivity, the country – and the world – holds its collective breath to see if the results are enough to pick up enough slack as the old, building-dependent growth engine fades into history.

-Andrew P.