China’s Market Wobble

China’s Market Wobble

150 150 Jamie Metzl

In my China/market interviews yesterday on Bloomberg TV and CNN Quest Means Business I expressed my concern that China, the world’s second largest economy, is getting caught between its desire for stimulus to address the short term crisis and its deep need for structural reforms to make growth sustainable over the long-term. As I’ve said repeatedly and for years, China’s biggest problem is its misallocation of all resources, starting with political power.  China has significant problems, maybe even bigger than the rest of the world realizes (which would explain their “nuclear” response to the stock market correction over the past two months), but the economic reforms Xi Jinping and his team are calling for may not be realizable solely with the predominantly top-down approach they are currently pursuing.