The Chinese economy has been under pressure for the better part of two years. During that time there have been countless calls by your typical economists for China to take fiscal and monetary measures to address the issue. Basically, do what American and Europe have done for decades.
China, and this is open to debate, has looked around at other nations and learned that the Keynesian approach doesn't solve underlying structural issues. It only postpones the inevitable. What is needed is pain and the Chinese leadership has made the policy choice of aggressively deleveraging its economy. Think Japan, but doing so over a few years rather than 30 years.
What isn't known is if this approach will actually work. The Chinese are, indeed, feeling pain. There will come a time when that pain proves to be unbearable. Don't think we are there yet based on what I see here in Shanghai and from various conversations. Still, the needle needs to be thread carefully.
Hope this answers your question.
prc30 / Peter Alexander
npub1yy…4kawc
2024-09-20 02:48:45
in reply to nevent1q…c5ry
Author Public Key
npub1yy3uc7y85faxy5cwq8f574yda3j9457p7r9h2ymlkwlx6lp8f4vsy4kawcPublished at
2024-09-20 02:48:45Event JSON
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