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In the first place, such an approach would require China to roll out a much more comprehensive social safety net, and Xi is committed to maintaining fiscal discipline. More importantly, however, Xi believes consumption-led growth conflicts with his ambition to transform China into a global leader in cutting-edge industries such as artificial intelligence, robotics, renewable energy and electric cars. But Beijing’s reluctance to introduce major structural shifts in the Chinese economy is exacerbating the likelihood of contagion from the country’s worsening property slump to its large and opaque shadow banking sector. Erosion of confidence Earlier this month, Zhongrong International Trust...
