China’s economic problems have been diagnosed. Will policymakers act?

For most of this year, the dominant framing of China’s economy has been “K-shaped”: strong technology and export sectors pulling away from a weaker domestic base. In July, at an online seminar hosted by Renmin University’s China Macroeconomy Forum, Tsinghua University economist Li Daokui said that framing was itself the problem. China’s real issue, he argued, was not divergence between a rising line and a falling one but a whole economy that had been running cold for three years. The strong...