Davos 2019: Kenneth Rogoff Says China’s Economic Slowdown Isn’t Temporary

China is staring at a long-term slow growth rate, which can't be fixed even with a big stimulus as in the past, according to Kenneth Rogoff.

“China’s slowdown is much more fundamental on running out of steam on productivity,” Rogoff, professor of Economics & Public Policy at Harvard University, told BloombergQuint on the sidelines of World Economic Forum in Davos, Switzerland. “They’re centralising power, decision-making and weakening the private sector; everyone is afraid of being put in jail. They are also putting money into zombie state-firms. This is not a recipe for 10-percent growth.”

Rogoff also said there were imbalances in the Chinese economy like infrastructure spending and housing which needed to be addressed with permanent solutions than credit-driven stimulus. “They could do reforms as promised by President Xi Jinping,” he said. “That could give them a longer period but I don't think it would permanently change the downward trend.”

Watch the full interview here: