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Xi Is Running Out of Time
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Xi Is Running Out of Time

China’s Economy Heads for a Hard Landing

Daniel H. Rosen
Foreign Affairs, 2021
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China’s economy is headed for a decline sooner rather than later, says foreign policy expert Daniel H. Rosen in this illuminating commentary. Policy reversals and misguided incentives in the name of national security show the Chinese Communist Party’s attempts at self-preservation, he writes, and China’s financial markets and economy will not reach full throttle until the government effects needed reforms. Students of geopolitical economy will find this article on China’s challenges particularly instructive.

Summary

The near-term prospects for China’s economy are downbeat.

In early 2021, President Xi Jinping expected to have ample time to tweak the country’s economic model and set it on a solid course of growth. But circumstances quickly shifted, generating concerns that China’s economy is susceptible to ill-conceived and badly executed policy changes.

In mid-summer, China clamped down on the runaway growth of its tech sector. Then property developers began to face cash crunches on debt payments. An energy supply crisis followed, which reduced manufacturing output.

Economic policy makers have stumbled in critical areas.

China had embraced the high-tech sector as an engine of economic...

About the Author

Daniel H. Rosen is a founding partner of the research and consulting firm Rhodium Group, where he heads the firm’s work on Asia.

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