Remarks
Beijing Pays the Price for the Slow Pace of Economic Reform
A creaky financial system hinders China’s stimulus efforts.
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As the world’s largest nations send out helicopter money amounting to well more than 10% of their gross domestic product to fight the economic effects of the coronavirus pandemic, China, which just suffered its first economic contraction in two decades, is conspicuous for its stinginess.
There are no cash handouts like the ones Americans have started receiving from Uncle Sam, or small-business loans that can be converted into grants. Instead, the stimulus estimate for China is almost embarrassingly small, at only 4% of GDP. Beijing is deploying indirect measures such as tax cuts, which aren’t so helpful to a business that can’t make any sales at all during the global lockdown.