China has a big economic problem, and it isn’t the trade war – Yasheng Huang

Yasheng Huang, Epoch Foundation Professor of International Management & Faculty Director of Action Learning, MIT Sloan School of Management

From The New York Times

A decade ago, after the 2008 global financial crisis, China seemed to save its economy by decoupling it from the rest of the world’s with a massive domestic investment program. Today, it is progress on the trade war with the United States, or the recoupling of China’s economy with those of other countries, that is seen as the way for it to regain momentum.

But to think in these terms is to miss the main point: The trade war has merely compounded an economic slowdown in China that is substantially of the country’s own making.

The deceleration is serious. In 2018, China’s gross domestic product grew by about 6.5 percent, the lowest rate since 1990. And part of the slowdown is a predictable result of deliberate government decisions, in particular policies that favor the state sector at the expense of the private sector — even though the state sector is woefully inefficient, whereas the private sector has long been the country’s growth engine.

Read the full post at The New York Times

Yasheng Huang is the Epoch Foundation Professor of International Management and Faculty Director of Action Learning at the MIT Sloan School of Management.

Leave a Reply

Your email address will not be published. Required fields are marked *