China Economy

China says ‘it won’t panic stimulate’ this time

David Llewellyn-Smith
Tuesday, 24 August 2021
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As we know, there have been three large scale reform and stimulus periods in China since 2011:

  • 2012 reform to lower investment and higher consumption.
  • 2013/14 higher investment and lower consumption.
  • 2015 reform to lower investment and higher consumption.
  • 2016/17 higher investment and lower consumption.
  • 2018/19 reform to lower investment and higher consumption.
  • 2020 higher investment and lower consumption.

Although this looks pretty damning in terms of wild policy gyrations, it has not been without progress. The consumption share of growth is higher today than in 2011. And there have been important structural legacies such as local government bond markets, deleveraged developers and yuan liberalisation.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.