China’s State-Driven Growth Model Is Running Out of Gas

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China’s State-Driven Growth Model Is Running Out of Gas
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A recession or crisis may not be imminent for China, but absent a change in direction, China may never become rich, writes Greg_Ip

New data showing the toll trade tensions are taking on China’s economy are merely a symptom of a more serious malaise: The country’s state-led growth model is running out of gas. A recession or crisis may not be imminent, but the long-run implications are just as serious. Absent a change in direction, China may never become rich.

The economy’s growth slowed to 6.2% in the second quarter, a near-three-decade low. That’s still pretty good for a middle-income country with per-capita gross domestic product of $14,000 to $18,000...

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