2/10 Li's argument is that Xi Jinping and the people around him have had a change of view on the idea that support for the household sector will cause Chinese workers to become lazy (he calls it the British disease). They are now more willing to subsidize household spending.
4/10 The two main sources of demand for any economy, after all, are investment and consumption, and the three major investment areas in China all had problems. It was obvious that property investment – one of the three – wasn't going to be a source of growth.
6/10 That's because Beijing was wary of the sheer extent by which, over the past decade, non-productive infrastructure investment had caused the surge in local-government debt burdens. They want to restrain the former to rein in the latter.
8/10 a growth strategy in which China's share of global manufacturing (currently 31%) would rise at twice the rate its share of global GDP (17%) and at 3-4 times the rate of its share of global consumption (13%). The rest of the world was never going to accommodate this.
10/10 But that wasn't the right way to look at it. What Beijing has to choose is not between "welfarism" and "no welfarism" but rather between "welfarism", a disruptive surge in debt, and missing the growth target altogether.https://t.co/veczgJRneH
— Thread Reader App (@threadreaderapp) June 15, 2024
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David Daokui Li, Tsinghua Professor and former monetary policy advisor, says Beijing has finally come around to stimulating domestic consumption rather than investment, and Beijing will provide more welfare in the upcoming 3rd Plenary Session in July.https://t.co/VMybmcYPBc