China stimulus: Short-term benefits versus long-term challenges

AT THE END of last year, Beijing softened its stance on monetary policy, replacing the word “prudent” with “moderately loose” for the first time since the 2009 credit explosion. This shift raised hopes that China was preparing to take serious action to revive economic growth.

At the time, I said that this wouldn’t make much difference because of China’s long-term internal structural challenges and the jeopardy facing its exports because of global, notjust including the US, trade tensions.