Brad Setser: Why China's Incomplete Macroeconomic Adjustm...

Brad Setser: Why China's Incomplete Macroeconomic Adjustment Makes China 2025 a Bigger Risk: "China... wants to 'localize' the production of the bulk of the high tech goods that its economy needs... Made in China 2025... a mix of subsidies (some disguised, as they flow through state-backed investment funds and the financial sectors) and 'Buy China' preferences.... Losses... China is good at both hiding them���and, well, absorbing what at the time seems like large losses as an inevitable cost of its rapid growth. The usual argument against such a mix of industrial policy and protectionism is that it just won���t work. A country that subsidizes its industries ends up with inefficient industries.... But China, is, to use Philip Pan���s phrase, the state that failed to fail...

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