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George Magnus talks debt, trade and the direction of China’s economy

By Timothy Ang

Since the onset of the reform era almost four decades ago, China has relied on heavy investment and credit expansion to achieve unparalleled economic growth as an emerging economy.

Now, as China settles in as a major economic power, pressure points are appearing that suggest it is time for the country to make its long-awaited transition to a new growth model.

Slowing demand, tariff threats and the emergence of large asset bubbles have left Beijing fighting fires on all fronts.

In his latest book, Red Flags: Why Xi’s China is in Jeopardy, veteran economist and commentator George Magnus examines the root of these structural weaknesses and argues how a failure to adequately reform could stunt China’s economic aspirations.

China Economic Review caught up with George to get his view on the current state of affairs in the Middle Kingdom.  Read on…..