How China's rural deficit impedes recovery

Overview

For political and social reasons, the Chinese government is seeking to boost the countryside where more than 700 million of its people still live. Increasing their incomes and consumption is seen as a key element in making the economy less dependent on fixed asset investment and exports. But the current rural stimulus package of subsidies, abolition of taxes, increased grain prices and purchasing incentives will have limited impact because it goes in the wrong direction by supporting...