XI'S POLICIES HOBBLING CHINA'S ECONOMY

"China’s economy is a ticking time bomb,” said President Joe Biden last week at a political fundraising event in the American state of Utah. It’s certainly in trouble.

- JOHN DOBSON

The consumer price index, the main gauge of inflation, fell 0.3% in July, a clear sign say analysts that the Chinese economy is weakening and in worse long-term shape than is widely understood. On Tuesday, China’s central bank unexpectedly cut key policy rates for the second time in three months, but economists warn that these were too small to make a meaningful difference.

Belief in a Chinese economic juggernaut has been a core assumption in the mainstream understanding of the global economy and diplomatic landscape for a generation. The realisation that the juggernaut is now beginning to resemble a clapped-out banger is causing serious concern among economists around the world. Adam Posen, president of the Peterson Institute for International Economics and a former voting External Member of the Bank of England, describes China’s economic problems as “economic long Covid”, due to a persistent dearth of investment and consumer demand. Others are pointing the finger at Xi Jinping’s mismanagement of the economy in recent years.