China’s demand dilemma could spell trouble for the world

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The G20 is supposed to be the premier forum for management of the global economy and the biggest economic issue in the world right now is a chronic lack of demand in China.

It is therefore more than unfortunate that president Xi Jinping has decided not to attend the summit in New Delhi this weekend, sending premier Li Qiang instead, and highlighting in the process just how few options other countries will have if China tries to solve its economic challenges by falling back on demand from the rest of the world. Since Xi will not be there to address it, the other world leaders should consider in his absence exactly how they would handle this scenario.

As Brad Setser of the Council on Foreign Relations points out, economic weakness in China has little direct effect on other advanced economies, because China makes so much for itself and buys so…

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