Leading US analyst Paul Krugman, who won the 2008 Nobel Prize for Economics, said there is “widespread skepticism” about China’s official GDP growth of 5.2% last year and that the Chinese economy seems to be stumbling and suffering the sort of deflation Japan endured in recent decades, according to a commentary published in the New York Times on Thursday.
Krugman said President Xi Jinping was “starting to look like a poor economic manager” as his habit of “arbitrary interventions” had stifled private initiative, but he noted that it had been clear for a long time that China’s economic model was becoming unsustainable, because of its very low consumer spending. He said Beijing needed to allow more income to flow through to households and boost the social safety net so consumers don’t feel so compelled to hoard cash.
Read the full report: The New York Times.
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