Beijing Dithers as the Economy Declines
China’s slowdown is more acute than appreciated, and December’s policy summit failed to set a clear direction.
The collapse in consumption tax revenue is an ominous sign.
Photographer: Gilles Sabrie/BloombergChina’s annual economic policy summit has come and gone, leaving a wet lump of coal in place of stimulus hopes. Beijing will have to do better if it wants to steer the country to another year of robust growth.
The economy started slowing in September, and has only worsened since then. Consumption tax revenue was up 16.3 percent year-to-date as of that month. In the following two months, it collapsed, recording declines of 62 percent and 71 percent from a year earlier. Value-added tax revenue has also turned negative in the past three months. All this is a good sign that the economy’s deterioration is more rapid and pronounced than the government has acknowledged.