China seeks to limit unexpected economic risks with ‘fallacy of composition’ warning
- Study Times, a publication under the Central Party School of the Communist Party of China, warned of a ‘fallacy of composition’ phenomenon
- It said the pursuit of individual department policy goals could ‘lead to unintended disruptions to the economy and hit market expectations’
A key Communist Party publication on Wednesday warned that a zealous pursuit of individual department policy goals, despite their good intentions to honour Beijing’s guidelines, could backfire and bring “unexpected risks” to the economy.
The “fallacy of composition” phenomenon was raised by a front-page commentary by the Study Times, a publication under the Central Party School.
“The various policies introduced by each department to achieve their own goals sometimes have generated overlapping effects. If excessive force is applied, it could generate a strong contraction effect,” the commentary said.
“[It] may lead to unintended disruptions to the economy and hit market expectations.”
In the past decade, ministries and regional authorities have rolled out policies that were within their policy domains, but turned out to be highly controversial, including forced closure of factories to achieve environmental and energy-saving targets.