Rogoff: China Understands It Has a Credit-Fueled Bubble

The transcript discusses the challenges faced by Chinese authorities in managing their economy, particularly in dealing with a credit-fueled bubble and the need to shift focus from loss-making industries to the service sector. It also touches on the role of foreign reserves in stabilizing currency and managing bad debts, highlighting the complexity of economic management in China.

What is one of the main challenges the Chinese authorities face in managing their economy?

• Reducing foreign investments

• Increasing the credit bubble

• Shifting focus to the service sector

• Expanding loss-making industries

Why are Chinese authorities hesitant to increase the deficit to 6%?

• They want to boost the economy further

• They aim to maintain economic stability

• They plan to increase foreign investments

• They wish to expand the manufacturing sector

What role do foreign exchange reserves play in China's economy?

• They are used to fund new infrastructure projects

• They are solely for paying off international debts

• They help stabilize the currency

• They are used to increase foreign investments

What is a significant use of China's foreign exchange reserves?

• To expand the coal industry

• To fund new technology startups

• To increase the national deficit

• To stabilize the currency

What is unclear about China's foreign exchange reserves?

• The total amount available

• The extent of their commitment

• Their role in international trade

• Their impact on the service sector