China’s counterproductive crackdown on the rich is risky business
The CCP’s efforts to control the private sector will deter innovation and investment. It will make transitioning towards a high-skilled, high-wage domestic economy much harder.
Is there a larger purpose to the Chinese government’s recent actions against the country’s largest corporations, and does its clean-up of the financial sector fit into its economic strategy?
China has sought for at least 15 years to rebalance its growth from exports and fixed-asset investment to greater domestic consumption – efforts that have assumed a new urgency, owing to conflicts with the US and other countries.
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Raghuram G. Rajan, former governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business.
