In recent years, the Chinese authorities have undertaken the most aggressive stimulus package in the recent years. The Chinese Central bank would likely need to further cut interest rates, having already cut four times since November last year. Furthermore, China has had an active fiscal policy and credit expansion in the last few years as […]
China’s slowing economy will need to rely on reforms to give it another boost. In the past few decades, reforms have been a potent development tool, stimulating the economy whenever it has hit a plateau. And yet, the progress of China’s reform program has been less impressive than its design and announcement. The problem is […]
Most people have something to be disgruntled about China’s economic situation – whether it is its low consumption demand and large external surpluses, industrial overcapacity, environmental degradation, or the range of government intervention spanning from capital controls to financial repression. Pessimists have long called for the demise of the Chinese model, each focusing on a different subset of […]
I view the prospects of the Chinese economy in the coming years with guarded optimism – guarded because distortions are rampant in the economy – from the vast misallocation of resources to the highly distortionary macroeconomic structure that propels a vicious cycle – but optimistic, for exactly the same reason. The existence of important and pervasive distortions means that there […]
