The writer is a professor at Cornell University, senior fellow at Brookings and author of ‘The Future of Money’

To all appearances, the Chinese economy, which was struggling for most of last year, has stabilised. This is good news for China’s government and the world economy. But Beijing is yet again putting off fixing its deep-rooted economic problems. That, too, has consequences for China and the world. 

Last autumn, the Chinese government deployed fiscal and monetary policy stimulus to support growth. The Trump tariffs seemed set to knock the economy off course. Yet remarkably, in the first half of 2025, China might well scrape together 5 per cent growth, which the government set as its target. For whatever the data is worth, industrial production, broad measures of credit and total investment are all growing reasonably well. Better yet, retail sales, a proxy for household consumption, have picked up pace.