China Delays Liberalization

The political bosses in China know that their positions are only safe from political unrest as long as the economy keeps growing – fast.  But China is at a stage where pumping huge resources into infrastructure and real estate and the basic building blocks of an economy is no longer productive.  Changing course, towards a more consumer oriented consumption economy with less restricted capital flows, will require some short term pain for long term gain. And there is no indication that the Chinese Communist Party is willing take any chances on short term pain if it delays growth. 

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