Nobel Laureate Says China Enters Era Of Stagnation

And talks about the causes of the crisis.

American economist and Nobel laureate Paul Krugman has said that China is entering an era of stagnation. This is reported by the The New York Times.

According to the economist, China is experiencing a Japanese-style deflation. The situation is aggravated by high unemployment among young people. All this, according to Krugman, points to the beginning of an era of "stagnation and disillusionment".

According to Krugman, the reason for this situation is the suppression of private initiative, low interest rates on savings and the provision of cheap credit to privileged borrowers. According to the economist, the situation is also exacerbated by the inadequacy of the social security system.

To overcome the current situation, the economist says China needs to redirect most of its income to households and strengthen the social protection system, which will reduce investment costs.