China’s economy keeps flashing warning signs that it is losing steam—but, unlike past episodes, Beijing isn’t likely to stoke the fires to boost growth
The world’s second-largest economy, battered by a trade war with the U.S., is experiencing a slowdown that is more broad-based than any it has faced since the global financial crisis. This time, the problems aren’t just cooling global growth, but also more sluggish domestic activity, reflecting both anemic production and demand.
Behind the reluctance to stimulate: The leadership’s judgment that a cooling economy is inevitable, and part of its plan to crack down on rising debt levels. SHARE YOUR THOUGHTS What do you think of Beijing’s strategy to ride out an economic downturn rather than trying to address it? Join the conversation below.
But that was before a sharp economic slowdown late last year and escalations in trade tensions with the U.S., which prompted Chinese authorities to begin 2019 with a burst of stimulus measures, including tax cuts, pledges to lend to small companies and ordering municipal governments to fund infrastructure construction.
“It marks a long-term change in China’s policy-makinging as they are trying to contain asset bubbles,” said Chaoping Zhu, an economist J.P. Morgan Asset Management.
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