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Pandemic Recovery: China First To Withdraw Stimulus Efforts

Xi Jinping
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EDITOR NOTE: No nation is truly out of the shadows of the pandemic’s economic perils. However, here’s where most of the world stands. Certain countries in the EU are undergoing a third lockdown. America is in full-bent stimulus mode. And China appears to be on the vanguard, leading the globe in slowly withdrawing stimulus efforts to boost the economy. What China is attempting to do is a very delicate game that relies on timing and balance. One wrong move and the economy may end up with a series of fires to put out. Hence, the world is watching. Unfortunately, the same cannot be said for the US. But again, the cost of freedom is restraint from the heavy-handed centralism that the Chinese government can quickly and coercively enforce. All you have to do is take a look at how they implemented lockdowns and you’ll get the picture. We follow a democratic process. But a democratic process in a time of deep economic crisis may not yield a quick-enough result. In addition to this, America’s “go-big” agenda with regard to monetary policy and fiscal spending may leave the country much weaker economically than it had expected. No, it’s time to take matters into your own hands and hedge your own wealth at a time when democracy under the Dems may only erode the wealth that you struggled for years to accumulate. 

As the first major economy to beat back Covid-19, China is now taking the global lead in moving to unwind its pandemic-driven economic stimulus efforts.

Unlike the U.S. and Europe, which are still flooding their economies with liquidity and spending, China has started reining in credit in some corners.

The shift puts China at the vanguard in confronting a challenge other economies will face in coming years as their economies recover: how to withdraw stimulus without snuffing out growth or causing broader market instability.

China’s policy makers have expressed concern about an overheating housing market and want to prevent bigger imbalances. They are also eager to resume a multiyear campaign to curb debt that started building during the previous global recession.

If mishandled, China’s tightening could impair its recovery, which would crimp the global economy. China’s plans could also create wider problems if they trigger more debt defaults or a bigger correction in China’s stock markets, at a time when global investors are already jittery.

Read More on the Wall Street Journal

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