China

Xi Jinping’s market pivot aims to resuscitate China’s economy, but bloated subsidies and a global trade war might choke the recovery.

Most readers of Aussienomics are probably still busy soaking up the Australian summer rather than looking for interesting tidbits in their inboxes. But for those of you still checking your emails, here are a few of my thoughts on some of the essays, papers and news I’ve read over the break.

China’s stimulus under-whelms; the laws of mathematics trump the laws of Australia’s former Prime Minister; what the future holds for AI and autonomous vehicles; protectionism and industrial policy are failing the world; and India’s institutional limits under Modi.

China’s economic woes, driven by past stimulus, misguided industrial policies, and excessively tight monetary policy, are pushing the country toward deflation and a Japanification of its economy.

Australia’s economic outlook hinges on shifting global supply chains and iron ore demand, as China’s manufacturing dominance faces challenges from emerging competitors and geopolitical tensions.