China Economic 'bazooka' likely to misfire without essential reforms

The economist and author George Magnus says Beijing's new stimulus strategy is the very definition of fiscal insanity

- George Magnus

China's leaders seem to have invoked the definition of insanity, attributed, perhaps wrongly, to Einstein: doing the same thing over and over again and expecting different results.

For the fourth time in 16 years, Beijing has been spooked by faltering growth into adopting stimulus measures designed to reset the economy. It didn't work for long in 2008, 2015 or 2021, and the "bazooka" measures announced recently will also most likely come up short.

These programmes failed in the past because the government's focus is mainly on the cyclical - or short-term - outlook. It thinks quick palliatives are the answer to systemic problems such as high youth unemployment, the property bust, weak productivity and deflation.