Is The China Moon Finally Falling?

Is The China Moon Finally Falling?

The Chinese economy is tilting toward what some observers might call a recessionary slowdown (not a true recession) but which market-centered critics might prefer to characterize as the imminent collapse of another centrally planned economy. Bad news about economic conditions has been surfacing regularly, from equity-market declines to declines in infrastructure spending. Beijing’s response has been to reduce taxes, especially on the lower and middle rungs of the economic ladder, to control off-balance-sheet lending and to alter bank regulations, thereby freeing capital to be injected into the economy with regular-bank loans (thereby shutting out so-called shadow-bank loans). If these actions fail to keep the economy at the targeted 6.5 percent growth rate, Beijing will try something else. Overall, the Chinese economy will be slowing down, as planned, but it is not headed for the oft-envisioned economic collapse.

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