Michael Pettis
Michael Pettis

@michaelxpettis

4 Tweets Jan 07, 2023
1/4
"Beijing should focus on revitalising its beleaguered private sector to stabilise economic recovery, Chinese economists and policy advisers say."
Among other things, they say, Beijing must "lift expectations and confidence among entrepreneurs."
sc.mp
2/4
This may at first sound reasonable, but is in fact based on a misunderstanding of the underlying problem. The main problem with China's entrepreneurs isn't that they lack confidence, but rather than they lack demand.
3/4
The fact that years of supply-side support has only left them weaker and less confident than ever should show that what the private sector really needs, ironically, is less direct help and more indirect help through demand-side policies that benefit consumers.
4/4
For what I assume are mostly political and institutional (and perhaps ideological) reasons, however, these are the policies that Beijing has the most trouble delivering.

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