If you ask people here in Chengdu they will say it is doing fine, even professional economists will say that. In fact they are surprised and unprepared to respond if you raise concerns. Yet their answers do not fully convince me. One said after a pause:
The economy is fine, the government said it will grow over seven percent this year.
The economy here is great, last year we held an international congress in Chengdu.
When I raised the typical worries, they were more or less shrugged off. There is an attitude out here – in China’s “west” – that of course these problems exist, the people from Beijing and Shanghai have been screwed up for a long time, but we fine folk of Chengdu have known about that pretty much forever don’t let it bother you now. As a point of comparison, I spoke to a number of highly informed people in Shanghai and they were much more pessimistic about the Chinese economy.
Could it be Chengdu’s rise to prosperity is so recent — considerably postdating that of Shanghai or Beijing or the South — that such a growth experience is still the dominant emotional memory and thus it cannot be dislodged from people’s minds? If that were the case, people out here are truly unprepared for the Chinese economic squeeze in progress and that will make it much worse.
I have seen quite a good number of empty apartment buildings along various roads and the most common sight in town is the sign “Louis Vuitton — coming soon.”
Or shall we side with the simple null hypothesis that the residents of Chengdu are right and this foreigner — and much of the foreign press along with him — is simply misguided altogether?
In any case, this visit has increased the variance of my estimate for how China will do over the next few years.