China Can Spend More to Grow More
In 2020, China’s economy will probably grow by 2-2.5% – significantly better performance than the other major economies, which are facing contractions. But China still faces serious challenges, which can be addressed only by implementing a more expansionary fiscal policy in the near term.
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BEIJING – China’s economy seems largely to have bounced back from the COVID-19 shock. It registered 4.9% annual growth in the third quarter of 2020, and the rate may well exceed 5% growth in the fourth quarter. The result would be at least 2% annual full-year growth – not bad at a time when much of the world is facing a pandemic-induced recession. But that doesn’t mean smooth sailing ahead.