2/5
China has structurally a very different problem than do the US and Europe, to whom the article is implicitly comparing China. In the US and Europe, expansionary policies mostly boost the demand side of the economy more than the supply side.
China has structurally a very different problem than do the US and Europe, to whom the article is implicitly comparing China. In the US and Europe, expansionary policies mostly boost the demand side of the economy more than the supply side.
3/5
This, of course, tends to be inflationary. In China expansionary policies boost the supply side of the economy more than the demand side, which explains its very weak domestic demand, why even with rising commodity prices inflation in China is so low.
This, of course, tends to be inflationary. In China expansionary policies boost the supply side of the economy more than the demand side, which explains its very weak domestic demand, why even with rising commodity prices inflation in China is so low.
4/5
Low inflation in China, in other words, doesn't mean that China has room for more expansion but rather that domestic demand is weak. More expansion would actually reduce inflation further, not raise it, which means that what Beijing should really do is reverse this expansion.
Low inflation in China, in other words, doesn't mean that China has room for more expansion but rather that domestic demand is weak. More expansion would actually reduce inflation further, not raise it, which means that what Beijing should really do is reverse this expansion.
5/5
Expansionary policies clearly mean something very different in the US and Europe than in China. Because the Chinese economy is structurally different than are the US and European economies, we should stop analyzing it as if it the same conditions applied.
Expansionary policies clearly mean something very different in the US and Europe than in China. Because the Chinese economy is structurally different than are the US and European economies, we should stop analyzing it as if it the same conditions applied.
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