September 30th, 2021, marks the 60th anniversary of the creation of the OECD—the Organisation for Economic Cooperation and Development. The organization was the post-WWII flagbearer for market economics, offering a positive vision of the benefits of cooperation among market democracies. By emphasizing analytical expertise to find pathways to policy alignment, the OECD achieved success and helped define the character of post-war liberal political systems in competition with authoritarian statism. Today, market economies are struggling to agree on a competition model with non-market statecraft again. Rather than invent a new institution, they should take a fresh look at this existing one.
People are ravenous for a return to normal economic activity and to put the pandemic behind them. After two years of economic disruption, it is hard to remember what expectations even were at the start of 2020. Business cycles have been reset, and structural trends like globalization have been materially altered. So investors, policymakers, and business leaders want to believe Beijing when it says that 2022 will pick up right where 2019 left off with a return to 5-5.5% GDP growth. But by our reckoning, in an absolute best-case scenario, Beijing might deliver 4% GDP growth this year; and it is just as reasonable to expect 0% growth, or even a slight contraction. In this note, we break the numbers into investment, consumption and net exports, and do the math.
