![]() The official said that while it was not the first time China had sent spy balloons to the United States, this one has appeared to remain over the country for longer. The sudden appearance of the balloon is bound to raise already escalating tensions between the two powers. Blinken’s Beijing visit - the first by an American secretary of state in six years - during which he is expected to meet with President Xi Jinping. The decision to publicize the discovery appears to put China on notice ahead of Mr. President Biden has chosen, for now, not to shoot down the balloon after a recommendation from Pentagon officials that doing so would risk debris hitting people on the ground, according to a senior defense official who was not authorized to speak publicly. WASHINGTON - The United States has detected what it says is a Chinese surveillance balloon that has been hovering over the northwestern United States, the Pentagon said on Thursday, a discovery that comes days before Secretary of State Antony J. And in the short run, the government could just give people money - sending out checks, the way America has done.Live updates: The U.S. Get state-owned enterprises to share more of their profits with workers. The obvious answer is to boost consumer spending. ![]() Then China channeled excess savings into a monstrous real estate bubble, but this bubble is now bursting. ![]() ![]() For a while China maintained demand by running huge trade surpluses, but this risked a protectionist backlash. And the story of Chinese policy has been one of increasingly desperate efforts to mask this problem. The result is that China has a huge quantity of savings all dressed up with no good place to go. But that kind of growth is now a thing of the past. study argued that the biggest drivers are a low birthrate - so people don’t feel they can rely on their children to support them in retirement - and an inadequate social safety net, so they don’t feel that they can rely on public support either.Īs long as the economy was able to grow extremely fast, businesses found useful ways to invest all those savings. Why? I’m not sure there’s a consensus about the causes, but an I.M.F. Such a downturn may well reduce the amount businesses are willing to invest, so an attempt to save more can actually reduce investment.Īnd China has an incredibly high national savings rate. If businesses aren’t willing to borrow and then invest all the money consumers are trying to save, the result is an economic downturn. Why do things look so ominous in China?Īt a fundamental level, China is suffering from the paradox of thrift, which says that an economy can suffer if consumers try to save too much. As I’ve pointed out, even Japan, often held up as the ultimate cautionary tale, has done fairly decently since its slowdown in the early 1990s. However, slower growth needn’t translate into economic crisis. In any case, China clearly can’t sustain anything like the high growth rates of the past. economist Robert Solow famously quipped that attempts to explain why some countries grow more slowly than others always end up in “ a blaze of amateur sociology.” There were probably deep reasons China couldn’t continue to grow the way it had before 2008. But China’s slowdown began even before Xi took power.Īnd in general nobody is very good at explaining long-run growth rates. Certainly Xi’s focus on state control and arbitrariness haven’t helped. Many analysts attribute China’s loss of dynamism to Xi, who took power in 2012 and has been consistently more hostile to private enterprise than his predecessors. And China no longer has the demography to support torrid growth: Its working-age population topped out around 2015 and has been declining since.
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