China Faces Choice Between Control and Prosperity

China’s recent economic stabilization “doesn’t matter” and policy makers must deal with imbalances that are holding back development or risk suffering the kind of malaise that’s dogged Japan for decades, according to independent economist Andy Xie. One tonic would be to follow the lead of former U.S. President Franklin D. Roosevelt, who took office as the Great Depression ravaged the economy and put more money in the pockets of households to help engineer a recovery, Xie, who previously worked for the World Bank and Morgan Stanley, said Tuesday in an interview in Hong Kong. Xie, who featured in Bloomberg Markets 2013 list of the most influential people, has long said that China isn’t doing enough to foster growth in household spending and suffers because too much wealth is tied up in inefficient state-owned enterprises.

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