@michaelxpettis Fiscal expansion through households to increase consumption will creates debt also. You simply prefer the unproductive consumption over the unproductive investment.
@Brad_Setser China indeed has 25% tariff on imported autos, but China is open to any foreign auto companies to build autos domestically. In 2023, over 50% of the autos sold in China wear a foreign brand.
@PaoloMaldiniElC@michaelxpettis Pettis is right to point out China's over-investment problem, but the only solution is to cancel all unproductive investment, which means the investment and the total GDP must shrink. Anyway, the consumption, decided by the productivity, cannot be controlled by the government.
@PaoloMaldiniElC@michaelxpettis b/c there is no way to increase household consumption. The consumption is determined by the household income, which is determined by the productivity. But the government can do nothing to boost the productivity.