OK, so Communist China mastered capitalism, and are now in a jam. Since they own Hong Kong, they ought to next try free markets, or more anarchistic hands-off policies:
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The quarter-percentage-point reduction in benchmark lending and deposit rates on Sunday was primarily aimed at addressing debt-repayment problems that are increasingly weighing on the Chinese economy. But the rate action is likely to bring less benefit to the small companies that Beijing is counting on to shift to a more sustainable growth path, largely because Chinese banks remain reluctant to lend to them.To prod banks to make credit more accessible for borrowers the government wants to promote, the People’s Bank of China will speed up “targeted” measures in the coming months, according to PBOC officials and economists, giving banks more liquidity on the condition that they lend more to these groups.Pushing on a string, it is not going to work. They need to allow everyone to extend credit usury-free asset backed credit, and leave alone those who do well. Best policy is to do nothing, now that all other policies have failed. This will sort itself out, if left alone.
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