China's economy is stumbling, again. Slower-than-expected second-quarter growth statistics put "further pressure" on the Communist Party as its leaders gathered this week to plan the way forward, said The New York Times.Â
Those leaders have tried to offset the country's long-standing real estate slump with a boost to export-driven manufacturing, but that has led to a "glut of goods, from chemicals to cars," and a backlash, in the form of tariffs, from countries whose leaders "fear the flood of Chinese goods will overwhelm local industries." The result? China is "limping along precariously," said one analyst.
What did the commentators say? This week's meeting is about "long-term reform not short-term stimulus," said The Economist. One long-term problem: Consumer spending is "chronically weak in China." That is partly due to a "thin social safety net" that forces China's poorest households to scrimp and save instead of spend, added The Economist. Communist leaders could help goose that spending with a series of reforms, including "fatter state pensions and improved health care." To fix the economy now, any long-term reform must be accompanied by "further stimulus spending in the short term."Â
China must "recognize that its fundamental recipe for success has not changed," Brian Y. S. Wong, of the University of Hong Kong, said at the South China Morning Post. In the post-Mao era, China exploded from a poor nation into the world's second-largest economy by opening its doors to the world. A burgeoning "Cold War II" between China and the West has recently shifted the focus to "intense strategic rivalries." The best thing to do now is make China newly welcoming to foreigners, "whether they are tourists, students or skilled labor."
What next? Chinese leaders pledged to "better manage" the country's economy on Thursday, said Nikkei Asia. But there were "no clear bombshells and few details" about the plans or reforms going forward. "There's nothing hinting at China heading toward a different policy direction," said one analyst.Â
"Has China's economy peaked?" asked Deutsche Welle. The country is burdened with a "heavy debt load, slowing productivity, low consumption and an aging population" and faces increasing tensions with the West. There's a possibility that China's "impending economic supremacy may be delayed or never happen." |