This week marks the two-year anniversary of Xi Jinping’s ascendance to General Secretary of the Chinese Communist Party. Xi inherited serious economic problems, underappreciated at the time, and his response thus far has been largely cheap talk. The combination of inaction and daunting challenges threatens the end of China’s economic rise. Not a delay, the end.
Last month, China acknowledged a five-year low in growth of gross domestic product (GDP). Casual observers, such as former Treasury secretary Larry Summers, have turned bearish. While the new bears are right, they may not know why they are right. Chinese weakness is not one or two years old, it is eleven or twelve. [Source]