In an unusually blunt assessment of China’s economic prospects, a leading Chinese economist has refuted the popular market theory that the current slump is the result of a “K-shaped” economy — with some sectors like EVs and AI thriving and others declining — arguing that the core problem is an overall cooling that has persisted for three years.
Tsinghua University’s Li Daokui pegs the true unemployment rate at 10.2%, double the official figure, and says a decline in investment starting last year is unprecedented. He called for a massive central government bailout of local governments, whose infrastructure spending once drove growth but are now drowning in debt.
The latest data show both producer and consumer inflation falling, indicating broad weakness in domestic demand that is only partially offset by booming exports.