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China's Productivity Growth is the Worst Since the Asia Crisis

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Are Fiscal Policy Measures Working?


Government employees playing badminton in a Tianjin office lobby in the middle of the  afternoon. Hundreds of miles away in the northern city of Tieling, workers manually cut rubber truck parts in a tiny family workshop that makes about $600 a month.

They're different examples of the same inefficiency hampering China's rebalancing toward a consumption-led economy and weighing on income growth. Labor productivity growth is the slowest since 1999, when factory orders evaporated in the aftermath of the Asian financial crisis and state-owned enterprises cut millions of jobs.