web counter
LEXO PA REKLAMA!

SHKARKO APP

App Store
Google Play

Why is China in no hurry to fix its ailing economy?

2023-08-17 16:24:00, Kosova & Bota CNA

Why is China in no hurry to fix its ailing economy?

With China at risk of slipping into prolonged stagnation and a spiraling property crisis threatening financial stability, there is growing concern that its leaders are not rushing to revive the world's second-largest economy.

Even in a country known for murky and protracted decision-making, investors, analysts and diplomats are showing signs that Beijing appears reluctant to deliver the bold policies needed to support an ailing post-Covid recovery.

This is not only an economic problem, but a geopolitical problem.

US President Joe Biden - at odds with China over hot-button issues such as Taiwan, the democratic island that Beijing claims as its own - last week called China a "ticking time bomb" over its economic ills. "This is not good because when bad people have problems, they do bad things," Biden said.

So why has China's response been so lukewarm?

The view of some China watchers is that President Xi Jinping's focus on national security is limiting and working against economic efforts, scaring away the money Beijing says it is seeking to attract.

Others say the Communist Party's entrenched reluctance to moves that could shift power from the state to the private sector, and a government packed with Xi loyalists, could be stifling policy debate and stifling a response.

Of course, change in China can take time, as shown by its insistence on maintaining economically damaging COVID-19 restrictions for much of the past year, even as the rest of the world opened up.

China has shown timely resolve in the past, responding comprehensively to curbing growth concerns during the 2008-2009 global financial crisis and a capital flight scare in 2015.

Major policy changes are also often highly choreographed, with a December economic meeting usually the place to formulate such resolutions.

Economists say China needs measures to boost consumption and business confidence, such as tax cuts or government-funded consumption coupons, but add that unlike previous slowdowns, there are no quick fixes./ CNA





Lajmet e fundit nga