Desmond Lachman of the American Enterprise Institute writes about China’s economic struggles:
The Chinese government recognizes that, among many economic demands, it must wean itself from its currently unsustainable property and credit-led economic-growth model. That model has resulted in the Chinese property sector’s having grown to some 30 percent of the Chinese economy or almost double the corresponding U.S. ratio. It has also led to a situation in which housing prices in relation to income in key Chinese cities is considerably higher than those in London and New York.
It is against this backdrop that the Chinese economy can ill afford to have any further slowing in economic growth if it is to have any hope of growing itself out from under its property and credit-market bubble. Yet that is precisely what would happen if there were to be a U.S.-led intensification of trade sanctions against China. This is not least because China is a relatively open economy whose exports amount to close to 20 percent of total GDP.
Read the whole thing here.