China’s economic problems have been diagnosed. Will policymakers act?
What is missing is the willingness to redirect resources away from growth engines of the past and directly support Chinese households
China’s real issue, he argued, was not divergence between a rising line and a falling one but a whole economy that had been running cold for three years. The strong sectors everyone kept pointing to have been too small to pull up the rest.
Li previously served on the People’s Bank of China’s Monetary Policy Committee and directs Tsinghua’s Academic Centre for Chinese Economic Practice and Thinking. These credentials place him inside the policy establishment, not at its margins.
Using the International Labour Organization’s broader definition of unemployment, which counts discouraged workers the official statistic excludes, Li put China’s real unemployment rate at 10.2 per cent, with roughly 24 million people out of work long enough to count as chronically underemployed.