Why did Chinese economist slam Ray Dalio on debt situations in US, China?
Xu Gao, chief economist at Bank of China International (China), said in a recent 9,000-word article that Dalio was mistaken in calling for China to deleverage, arguing that such a view 'misjudges' the country's debt dynamics.
'China's recent debt-rollover issues were not caused by excessive borrowing, but by overly harsh deleveraging policies that disrupted liquidity,' Xu wrote in the article titled 'Where Did Dalio Go Wrong on National Debt?'
'Rather than doubling down on deleveraging, we need to correct the mindset behind it, which has already weighed heavily on the macro economy,' Xu said.
His comments, posted to social media on Thursday, came as economists and policy circles have been discussing whether more stimulus is needed in the second half of the year to shore up China's economy amid external uncertainties, a prolonged property downturn, and persistent deflationary pressures.
Attention is now turning to an upcoming Politburo meeting that is expected to
set the policy tone for the second half.
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