The U.S. and China kicked off two days of talks in Washington aimed at settling an escalating trade battle, with the U.S. claiming the advantage because Beijing is struggling to keep its economic growth from faltering.
Beijing has tried a number of approaches to strengthening its economy in the short term, including relaxing credit controls and encouraging more lending and spending, especially on highways, rail lines and other big-ticket government projects.
But the actions threaten to weaken the economy over the longer term, many economists warn. That is because China’s debt load has soared since 2009, when Beijing was fighting a global recession, and the trade fight may prompt Beijing to put off debt restructurings.