Matthew C Klein, Columnist

Will China’s New Economic Reforms Be Enough?

China's government is finally trying to boost domestic consumption.

November 15, 2013 at 6:44 PM UTC

Matthew C. Klein writes for Bloomberg View about the economy and financial markets. He previously wrote for the Economist magazine and its economics blog, Free Exchange. Before that, Klein was a research associate at the Council on Foreign Relations, where he spent more than two years studying the history of the Federal Reserve and the intellectual history of monetary economics for an upcoming book by Sebastian Mallaby. He also worked at Bridgewater Associates, where he studied the economies of Central and Eastern Europe and advised institutional investors on asset-liability management. Klein has a bachelor's degree in history from Yale University. Originally from Chicago, he lives in New York.

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Western observers have a history of misinterpreting events in China. Even so, three announcements from this week's meeting of the Chinese Communist Party look promising.

According to Xinhua, the government's official press agency, private investors will be permitted to establish regulated banks to serve small and medium enterprises, state-owned lenders will be forced to pay larger dividends to the government and the one-child policy will be effectively replaced by a two-child policy. While these three changes aren't sufficient to put China on the path to sustainable growth, they would definitely help solve China's biggest problem: too much investment and not enough personal consumption.