Containing China’s Slowdown

China’s economy is slowing its fast pace of growth. This year’s rate is projected at 6.3 percent. Lee Jong-Wha, an economics professor writing for Project Syndicate, points to weak domestic activity and external demand, falling fertility rates and an aging population, competition on wages from other nations, and a struggle to make productivity gains with technology. He suggests that China has broken the mold on economic growth and therefore may not follow the patterns of other countries as growth eases. “China’s total debt reached 282% of GDP last year – surpassing America’s debt level,” he writes. “The first step in any effective strategy must be to recognize that, in such a large and unpredictable economy, the government cannot rely on direct intervention or macroeconomic policies. Instead, it must implement reforms that boost productivity and offset downward pressure on growth.” He urges reforms on labor, land and finance, aiming for balance and sustainability, along with technological innovations and increased productivity as China evolves into a service economy. – YaleGlobal