Is China’s Stimulus Strategy Backfiring?
As US President Donald Trump does his worst to hobble China’s economy, China’s President Xi Jinping may be beating him to the punch.
There’s no doubt that Trump’s tariffs are destabilizing Asia’s biggest economy. Though the current 30% US tariff on Chinese imports is a fraction of Trump’s earlier 145% China tax, it’s still prohibitively high—Smoot-Hawley Act high. It’s complicating President Xi’s ability to stimulate China’s hamstrung economy sufficiently to make this year’s 5% real GDP growth target.
Ironically, among the biggest wounds limiting China’s growth potential is a Xi-inflicted one: The troubling chronic weakness of consumer spending, which shows no signs of picking up sustainably. Chinese consumers…
