China’s ‘Bismarck’ moment is finally afoot

In its latest assessment of China’s economy, the International Monetary Fund channeled Otto von Bismarck in ways global investors would be wise to consider.

No, the IMF didn’t mention the 19th century German chancellor. But the social safety net model Bismarck championed for Europe’s biggest economy was written between the lines in bold font.

Among the top reforms the IMF recommends is for Chinese President Xi Jinping to strengthen the social safety net to counter the ginormous pile of household savings that anxious citizens have amassed.

That, argues IMF economist Thomas Helbling, would spur China’s 1.4 billion people to increase consumption and, in turn, stabilize a shaky property market.