China's Great Economic Rebalancing, Part 3: Considering Failure

Despite policymakers' best efforts, worst-case scenarios sometimes come to pass. In the case of China's economic rebalancing, this scenario would involve a deep economic crisis and/or severe financial instability that sets the country's economic growth back for years. While these outcomes remain unlikely, they could occur if Chinese policymakers do not intervene forcefully enough in the face of excess savings and insufficient investment opportunities....