China sees policy divide as growth slows

Beijing

WITH China's economic growth heading for a quarter-century low, think tanks and advisers to the government are polarising into those calling for more stimulus to arrest the slowdown and a rival camp emphasising structural reforms as the route to sustainable growth.

The debate among the think tanks, which influence decision making, but do not wield direct power, is reflected in the ambivalent mood music coming from China's leaders, who accept the need to adapt to a "new normal" of slower but better quality growth, while fretting that a deeper downturn could fuel debt defaults, unemployment and social unrest.

To prevent growth from dipping below 7 per cent, some economists are urging Beijing to step up policy support on top of the two interest rate cuts sin…