Can China’s consumers save its economy?

MOST EMERGING economies struggle to live within their means. China, however, struggles to live up to them. Even in the best of times, the combined spending of its households, firms and government is not enough to buy all that it can produce, leaving a surplus that must be exported. The country has run a trade surplus for 34 of the past 40 years. And these are not the best of times. China is enduring its longest spell of deflation since the Asian crisis over a quarter of a century ago. An epic stockmarket rout since late 2022 has seen investors lose $2trn.Behind that panic lies a deeper fear among investors and officials, namely that China no longer has a reliable engine of growth. The country’s property boom is over. Cash-strapped developers are afraid to start building flats and people are afraid to buy them. The infrastructure mania has run out of road: indebted local governments lack the funds. Exporting goods to the rest of the world, which China relied on for decades to escape poverty, is getting harder as protectionism rises and Western countries become increasingly wary of relying on authoritarian states.