Foreign Policy: China’s Slowing Economy

China injected a record $83 billion stimulus package in January, highlighting the world’s second-largest economy’s desire to jumpstart growth in the new year after scoring a 28-year low in its rate of growth for 2018. Even though the Chinese government posted a 6.6 percent growth last year, experts question the accuracy of official data. So what is the true extent of China’s economic slowdown? Foreign Policy’s Keith Johnson reports that the intensifying trade war with the Trump administration and China’s “incoherent” fiscal policies are perhaps to blame. The tariff tit-for-tat with the United States gained momentum in fall of 2018, which means the consequences of the trade war are only beginning to show. If the two sides do not reach an agreement, the chilling effects of a downturn would become more apparent. In addition, Johnson writes that the Chinese government handed out contradictory policies that led to mounting debt and low investment returns. The key to avoiding a slowdown? A sharp increase in productivity. – YaleGlobal