China is at risk of falling into a prolonged period of deflation, Yale economist Stephen Roach says. The country's monetary stimulus blitz was a move in the right direction, Roach said in an FT op-ed. The two missing pieces are fiscal support and structural reform, Roach wrote in a new op-ed for the Financial Times. AdvertisementAccording to Roach, China's projected GDP rate of 4% over the next five years virtually mirrors Tokyo's situation 30 years ago. China now needs to do the same with fiscal stimulus.

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Persons: Stephen Roach, Roach, —, China's, Beijing's hesitancy, Paul Krugman, Krugman Organizations: Yale, Service, Financial Times, Communist Party's Locations: China, Beijing, Japan