Two Wrong Ways to Think About China's Slowdown

Don't blame its slowdown on a shift to consumption or rising debt.

How much can one person take?

Photographer: Greg Baker/AFP/Getty Images

Western observers struggle to make sense of what’s happening to the Chinese economy. Since China is slowing, dragging down commodity prices and forcing a number of other countries into recession, this in an important problem to puzzle out. But how should we evaluate China’s economy? I find that Western writers tend to subscribe -- explicitly or implicitly -- to one of two folk theories of China. Both have serious deficiencies.

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