The Chinese Economy

For John, BLUF:  They don't know which way to go, which is almost as bad as going the wrong way.  Nothing to see here; just move along.

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Here is a headline from yesterday's Business Insider:

It sounds like a dispute is taking place at the highest levels of China's government — and it could have big implications for the economy

A dispute at the top of China’s government may signal a policy shift ahead. But until that becomes clear, the main risks are policy paralysis in the world’s second-largest economy and heightened uncertainty about growth.

For the third time in the last year, the People’s Daily, China’s authoritative Communist newspaper, published an interview with an unnamed official who said policy change was necessary to avoid a financial crisis and recession.

This time, the official interviewed—identified only as “an authoritative person”—said China can’t rely on debt-driven stimulus to restore its economic health.

I think it is at the point that Professor Paul Krugman should call the Chinese Embassy.

Either way, we in the rest of the world should consider what happens if the Chinese Economy implodes.

Regards  —  Cliff