China is heading for a rocky future. Their Keynesian stimulus has been a disaster. Trying to work out what to do next is the question they must now answer. This is from China approves economic blueprint for 2016.

The plan approved in the meeting that ended on Monday comes after China’s year-long effort to stoke demand through interest-rate reductions and government spending has done little to bolster the economy. Many economists say those measures have saddled Chinese companies and various levels of government with more debt, potentially putting the economy at greater risks.

At the same time, economists say, Chinese consumers’ rising demand for safer food, better medical care and other quality-of-life improvements remains unmet. “We’re not facing a lack of demand,” the official close to the leadership’s thinking said. “What we need to do is to carry out supply-side reforms to meet the unmet demand.”

The point is that there is always unmet demand. What is needed is a system where private entrepreneurs are made wealthy if, but only if, they can work out for themselves what it is that demanders want and can then meet those demands while making a profit with no government subsidy of any kind.