Posted 11/21/2023, 2:00:15 PM
Chinese Economist Warns of Stagflation Risk If China Doesn't Boost Domestic Demand
- Chinese economist Yu Yongding warns of risk of stagflation if China does not quickly adopt expansionary fiscal policies to boost domestic demand
- Calls for loosening fiscal restraints like 3% budget deficit cap and using more sovereign bond issuance to fund growth
- Says China has room for expansionary fiscal policy unlike EU countries bound by deficit rules
- Warns against hastily calling an L-shaped recovery in China - says the bottom has not been reached yet
- Argues weak demand, not overcapacity, is the real economic problem China faces