A Weakened Chinese Economy May Be Bad for Everyone
Chinese demonstrations against Covid-19 restrictions in November 2022 illustrated the potential for unrest when citizens get angry with policy choices. Today, China is seeing pockets of protests over shadow-banking defaults.
Source: Bloomberg
“The world has really been very focused on how to deal with a strong China” for some time now. “We haven't really thought through some of the implications of a weak China.”
That question was posed by Deborah Lehr, a former US trade official who serves as vice chair for ex-Treasury Secretary Hank Paulson’s institute. It also happens to be the issue of the moment for many in markets and policymaking. China’s economic slowdown is leaving the Asian nation on pace for the weakest stint of growth since the era of Mao Zedong. And its financial system’s ability to deal with a wave of defaults is again coming into question.