China's Economic Challenges and Policy Missteps

China's economy faces significant structural challenges exacerbated by recent rate cuts, which may deepen deflation and hinder recovery. Weak consumer demand, stemming from a burst property bubble, contributes to a cycle of falling prices and rising insolvency.

Rapid credit growth and aggressive pricing strategies destabilize markets, while government stimulus focuses on supply-side measures, neglecting vital demand-side support. The emphasis on state-led industrial policies overlooks the need for comprehensive economic reforms.

Experts argue that the current strategy signals a reluctance to implement necessary changes. As China grapples with these complexities, the global response to its cheap exports poses further risks, highlighting the urgent need for a balanced and sustainable economic approach.