Xi Jinping has a problem. Communist China is caught in an economic doom loop. Chinese economists understand that their country must rebalance its economy by increasing domestic consumption and reducing dependency on exports. In addition, China’s economists understand that the country must stop investing in projects that generate low and often negative returns. 

But Xi, China’s all-powerful ruler, refuses to listen. He won’t embrace a massive fiscal stimulus with the goal of creating a basic social safety net, for example. He fails to recognize that with a social welfare system in place, Chinese households would be encouraged to spend more and to save less. Xi fears that even a basic welfare system would breed laziness. The result is that households continue to save heavily and China continues to rely on exports to generate jobs and economic growth.