Boosting consumption and disposable income should take priority over restoring the nation’s fiscal reputation.
Workers on the production line in Hebei Province, China. Credit: chinahbzyg, Shutterstock
On July 16, China announced that in the second quarter of this year, its economy grew 3.2 percent, a remarkably strong showing at a time when much of the global economy is in tatters because of the ongoing effects of a global pandemic. The figure suggested that China, once again, could lead the global economy during an economic and financial crisis.
But a closer reading of the data points to a much darker picture, for China and the rest of the world — including signs that structural problems at home could have deep and lasting negative effects on China and the global economy. The most serious problems could even exacerbate inequality, at home and abroad.
Let me explain. My reading of recent economic data released by China indicates that while it’s headline growth is strong, domestic consumption is weak and the country’s massive workforce of migrant and unskilled labor — workers who are the backbone of this “workshop of the world” — are being hit hard.While some figu
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