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First: Quantitative easing is prohibited by Chinese law. Article 29 forbids primary market bond subscription. This is never discussed.
Second: In 2015, one trillion dollars fled China in eighteen months. Beijing now threatens life imprisonment for capital flight through crypto. A government imposing life sentences to keep money inside its borders cannot afford loose monetary policy.
Third: Debt is not a liability in China. It is a political tool. Provincial governments remain dependent on Beijing precisely because they are fiscally precarious. Monetization would sever the control mechanism holding the Party together.
Japan printed to save its economy.
China is refusing to print to save its political system.
The implication: Deflation persists. Growth slows to 4%. The renminbi stays caged. Global disinflationary forces extend years beyond consensus.
The world has been waiting for Beijing to capitulate.
It will keep waiting.
This is not Japanification.
This is the Long Grind.
And nobody priced it in.
Read the full deep dive article here -
https://substack.com/inbox/post/181012927
https://x.com/GordonGChang/status/1998063715552477520

Gordon G. Chang @GordonGChang - Whether this reporting is correct or not, Prez Trump needs to find his voice when it comes to China. He apparently thinks that silence will buy good relations with Xi Jinping. On the contrary, Xi has been disrespecting Trump because, as we know from various sources, he perceives the American leader to be weak.