Eswar Prasad of Brookings has written the FT’s periodic instruction to China on how to run its economy. It follows the established template: concede the achievements in a subordinate clause, then explain that catastrophe looms unless Beijing adopts the policy mix of the countries currently growing at a third of its rate.

China, we learn, is “in serious trouble”, while growing at about 4.3 percent – a figure no G7 economy has come close to in years, and roughly double the US rate. Inflation has turned positive after a deflationary spell; industrial profits are rebounding. In any other country this would be reported as a soft landing. For China it is presented as calm concealing catastrophe.

China must “reduce reliance on public investment and exports”.

But since around 78 percent of China’s growth derives from capital inputs, cutting investment means cutting growth. This is simply the US inviting China to engage in economic self-harm. Public investment is the mechanism through which China has built its infrastructure, energy, transport, and industrial base. It is the mechanism through which China has lifted hundreds of millions out of poverty. It is the mechanism through which China has built a high-tech economy that now competes with the West across the board.

On exports, trade accounted for about 20 percent of China’s growth in 2025; the rest came from domestic consumption and investment. Meanwhile, household consumption is grew at 4.4 percent, in line with GDP. The claim that China free-rides on foreign demand simply is not what the data shows.

Next, China must “move away from low-wage, low-productivity manufacturing”.

This is frankly bizarre, because two paragraphs later Prasad concedes that China “has achieved remarkable success in high-tech manufacturing” and is delivering on Xi’s push for a high-value-added economy. He is demanding a transition that he has just acknowledged is underway.

China’s share of global patents rose from 4 percent in 2000 to 26 percent by 2023 while the US share fell more than 8 points; it now produces about a quarter of the world’s semiconductors against 16 percent for the US; it leads on green energy, EVs, 5G and satellite navigation. Average urban real wages have risen something like 2,400 percent since 1978. Whatever else this is, it is not a low-wage, low-productivity economy standing still.

China must “lessen the role of the state”.

Here we reach the actual argument, and everything else turns out to have been scaffolding. The reason China has not experienced a recession in fifty years – through the Asian financial crisis, the 2008 crash, and the pandemic – is the large state sector that can direct investment counter-cyclically and implement plan targets when private confidence falters. Prasad’s proposal is that China discard the mechanism that produced the results he spends half the article praising, in favour of the arrangement that gave the West secular stagnation, crumbling infrastructure and nearly two decades (and counting) of austerity.

Then the closing flourish: China’s claim to global leadership “rings hollow” while it “continues to count on the rest of the world to keep its own economy afloat”.

Hilarious. China runs a trade surplus approaching a trillion dollars and a net asset position with the world of around 18 percent of GDP. The United States runs a trade deficit of roughly $900 billion and net liabilities to the rest of the world of about 76 percent of GDP – a position that would trigger a currency run anywhere else, and is survivable only because of dollar hegemony. It’s New York, not Beijing, that is “counting on the rest of the world to keep its own economy afloat”.

None of this means China’s economy faces no difficulties. Youth unemployment is a serious problem, the urban-rural income gap remains wide, and the property adjustment has further to run. But these are the difficulties of an economy in transition to higher-value production, not the symptoms of impending collapse.

Anyway, the “coming collapse of China” has been predicted for a long time now. The Economist asked “Will China be next?” during the 1997 Asian crisis, then declared “A Dragon Out of Puff” in 2002, on the eve of a decade in which China’s economy grew 173 percent. In 2010 it predicted India would outpace China. As @johnross43 has observed, a reliable guide to China’s future has been to read these forecasts and assume the opposite.