“China’s an odd place ideologically. It’s not actually a communist society by any normal measure,” the Nobel economist said in a New York Times audio essay. “On one side, they don’t like to just giving people money. They don’t like people being financially independent, because they still want the government to be in control.”
But Beijing’s refusal to provide its consumers and businesses with some kind of aid, such as through a large stimulus program, means that its current economic challenges are free to expand.
Deflation, massive debt, falling growth, and rising unemployment have all been major themes in China this year, as consumers have largely limited spending. Though this is the outcome of necessity, Krugman also cited a strong savings culture stemming from Chinese history.
source: Business insider
