THE DRAGON HAS NO TEETH:

The CCP can dictate economic policy to government officials. The CCP can cut interest rates to stimulate the vulnerable Chinese real estate sector. But the CCP cannot compel the people of China to spend and not to save. The CCP cannot compel personal consumption when China's President Xi Jinping is telling the people of China to prepare for war against the United States .

The economic leaders of China predicted that as China emerged from the pandemic, the economy would expand by about 5% this year. Indeed, in the first quarter of this year, according to always suspect official state statistics, the economy expanded by 4.5%. But economic experts say that economic growth is stagnating in the current quarter. The Chinese people are conditioned to save as there is little to no safety net backstopping the economic fortunes of the Chinese people.

In addition to a moribund household sector, China continues to face the structural challenges of record-high youth unemployment, an over-leveraged real estate sector, weak demand from the private business sector, and an export sector that is under pressure because wages in China are increasingly uncompetitive in the global trade economy. China also suffers from the demographic weight of a rapidly aging population.

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