China’s Biggest Problem Isn’t Trump. It’s China.
Long before the trade war heated up, Beijing started cooling off its own economy.
Having some problems lately.
Photographer: STR/AFP/Getty Images
For all the tariffs and threats President Donald Trump hurls at China, they’re not nearly as harmful as what China throws at itself.
The country’s economic growth, once the envy of the world, has languished lately, and it’s easy to blame the trade war Trump has been ratcheting up all year. But China was slowing its economy down long before Trump got involved, in an effort to end some boom-era excesses, including overly risky borrowing. After its efforts worked maybe a little too well, it has tried to goose the economy here and there with tax cuts and liquidity injections. But Andrew Polk points out it still hasn’t rescinded its earlier belt-tightening mandates. And no, the trade war doesn’t help. The result is uncertainty and confusion that will keep China’s economy sluggish for the next year or more, slowing down the rest of the world.