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COVID-19: Putting the Chinese Policy Reaction into Context (VoxEu, 9 min read) According to Aberdeen Standard Investments, China has deployed only 40% of policy levers (credit and fiscal) compared with the GFC and in contrast to many other economies were far less aggressive. As a result, Chinese policy will not drive the global economy forward as much as it did after GFC.
China’s Economic Crossroads (Project Syndicate, 6 min read) Kevin Rudd and Daniel Rosen believe that, due to massive debt levels, China cannot pursue stimulus at the same scale as it did in 2008. To counter these limitations, they have announced a plan to allow ‘market-based allocation of factors of production’. But we should see these policies with scepticism: back in 2013 it failed on its market liberalisation promises.
Averting a Cold War of Choice (Project Syndicate, 8 min read) Javier Solana and Oscar Fernandez believe US-China rivalry can avoid evolving into a ‘cold-war mentality’. This mentality would not help the world cope with COVID or climate challenges. This ‘cold war’ is a war of ‘choice’ and not ‘necessity’.