China’s deeply entrenched countercyclical policy mindset is misaligned with its structural challenges: mounting deflationary risks, exacerbated by the lethal interplay between a rapidly aging population and serious productivity problems. The authorities need to devise a new response to unleash consumption-led growth.
NEW HAVEN – China is facing a broad constellation of problems: an underperforming economy, a superpower conflict with the United States, stiff demographic headwinds, and a serious productivity challenge. Its policy response so far has drawn on a playbook that has proven successful in the past but that may not be enough today. Battered from all sides, Chinese authorities need the courage and imagination to devise new solutions.
NEW HAVEN – China is facing a broad constellation of problems: an underperforming economy, a superpower conflict with the United States, stiff demographic headwinds, and a serious productivity challenge. Its policy response so far has drawn on a playbook that has proven successful in the past but that may not be enough today. Battered from all sides, Chinese authorities need the courage and imagination to devise new solutions.