1/- China has experienced a very lop-sided economic recovery driven in part by rising income inequality – especially obvious from the surge since May and June in luxury spending, even as overall consumption declined – and in part by Beijing’s focus on... https://www.ft.com/content/e0e2940a-17cb-40ed-8d27-3722c9349a5d

2/- supply-side boosts rather than demand-side income support. As a result production is recovering relatively quickly, but demand is limping to keep up.

Although the article misses this, Beijing’s failure to boost income for workers means that for the rest of this...

3/- year and next it must choose some combination of slower growth (higher unemployment), a higher trade surplus, and more state-sector investment. Obviously it is eager to avoid the first of these, the rest of the world has little appetite for the second, while the third...

4/- inevitably means a substantial worsening of the domestic debt burden and greater pressure on monetary policy.

This has been clear since April and May, and certainly by early July, but with this FT article I guess it has finally become officially a kind of market...

5/- consensus. The main question now is whether or not Beijing will try to change its policy response more in favor of the demand side. I think it eagerly wants to (“dual circulation”), but it will prove very difficult to do so, at least quickly.