The start of trade hostilities between the U.S. and China accentuates an important underlying theme in China’s own economy and the way it affects the world.
A big tussle is taking place within China that the leveling of tariffs by Washington and Beijing can only aggravate. That struggle is the effort by China to slow credit significantly: Enough to squeeze the shadow banking industry and rein in debt at state-run firms, but not so much that it causes a slump in overall growth.
Getting the balance right is tricky. Few countries manage to pull off soft landings, and trade conflict makes the task even trickier. China’s size means its domestic choices ricochet beyond its shores. If ev…
Read the full article at: https://www.bloomberg.com/view/articles/2018-07-08/trade-war-muddles-china-s-battle-to-curb-debt
