China’s Economy Is OK. The Problem Is Its Politics
Long-term fundamentals are stronger than pessimists think. A real recovery, though, will require reforms the government simply won’t make.
One-man band.
Photographer: Florence Lo — Pool/Getty Images AsiaPac
At their just-concluded annual planning meeting, Chinese economic officials unveiled a nine-point program aimed at promoting technological innovation and reviving growth next year. While the lack of any major new stimulus measures disappointed some analysts, China’s economic fundamentals look stronger than headlines in the West might lead one to believe. What is more likely to hold the country’s economy back is something Chinese technocrats don’t have the power to fix: its politics.
Even temporary relief is welcome, of course. An imploding housing sector has shattered consumer confidence. Meanwhile, China’s mountain of debt seriously limits growth possibilities. To hit an implicit target of growth target of 5% and steady the property sector, officials pledged more fiscal and monetary support and asked wealthy large provinces to contribute more resources.