Global Economics Monthly: Navigating China's Economic Rapids

Volume IV, Issue III, March 2015

The Chinese economy is off to a bumpy start in 2015. The International Monetary Fund is projecting real growth of 6.8 percent this year, the slowest in a quarter century. Recent data releases have highlighted weakness in a number of key areas of the economy, from retail sales to industrial output. Meanwhile, the prospect of a Fed rate rise later this year has put the People’s Bank of China in a bind, as it seeks both to cushion a deepening slowdown and to guard against potentially damaging capital outflows. This has intensified the debate over whether President Xi Jinping and his team of economic decisionmakers have the “right stuff” to manage a stable transition to a new model of economic growth. The Simon Chair has recently completed a two-year study of this question and will release its findings on March 31. Our assessment is that, while the odds favor China’s economic navigators, it is clear the economy is entering choppier waters...

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Matthew P. Goodman

Matthew P. Goodman

Former Senior Vice President for Economics

David A. Parker