1. If Stimulus Could Save China, It Wouldn't Need It.
- Author
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Sternberg, Joseph C.
- Subjects
- *
CONSUMPTION (Economics) , *SOCIAL Security (United States) , *ECONOMIC models , *INVESTORS , *BONDS (Finance) - Abstract
China is facing economic challenges, and there are calls for fiscal stimulus to boost aggregate demand. However, the problem lies in the lack of a viable long-term replacement for the old property-driven economic model. The government has implemented measures to stabilize the property market, but there is uncertainty about what comes next. Calls for a new form of stimulus, such as transfer payments directly to households, have emerged, but it is unclear how it would be funded. The article argues that China's savings should be its greatest asset, but the low productivity of those savings is the issue. The political controls on the economy and the lack of productive investment opportunities hinder the effectiveness of any new stimulus. [Extracted from the article]
- Published
- 2024