The Rubik’s Cube: China’s policy trilemma

By Douglas Turnbull, Investment Director, Head of Chinese Equities

China faces a 'Rubik’s Cube' policy trilemma, whereby it needs to sustain a minimum acceptable level of growth, deal with issues such as overcapacity and reform the financial system to make it a far more efficient allocator of capital. Given the contradictory nature of these objectives, there are no ‘big-bang’ policy solutions open to Beijing. However, what can be seen is a multiplicity of small steps being taken which do address these objectives complementary.

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