Under president Xi Jinping the state has again dominated China’s economy, with private companies holding a second place, says economist Arthur Kroeber at the Edge Markets. And for the coming ten years, he does not see a substantial change.
The Edge Markets:
One of the things that has been surprising, particularly since Xi Jinping took over, is the degree to which the state has held onto its huge position in the economy and in many cases reinforced it. The lack of progress away from a state driven economy to a more private-sector one has been disappointing but it has also been surprising that they have been able to maintain the pace of growth that they have, even with the state sector.
Ten years from now, I don’t think we are going to be in a much different place as far as the internationalization of the Chinese currency. As long as they have this problem of high leverage and a somewhat fragile domestic financial system, they are going to have very little incentive to allow full fluidity of capital flows into and out of the country.
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