China's Policy Stimulus Challenges

China is employing four problematic policies to stimulate its economy: subsidizing manufacturing, stabilizing the housing market, boosting the stock market, and boosting consumption directly.
Subsidizing manufacturing worsens imbalances by focusing on production instead of boosting consumption relative to production.
Stabilizing the housing market is challenging due to excess housing and a declining population.
Boosting the stock market offers limited impact due to a small float, wealthy speculators, and market volatility.
Direct consumption boosts through consumer coupons and other transfers are minimal due to decentralized spending and local government cash flow constraints.

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