China’s economy, long a source of global dynamism, is changing into a source of instability. Growth, still rapid by international standards, is gradually decelerating, as a nearly three-decade-old investment- and export-led strategy delivers diminishing returns. Yet the Communist Party, beholden to — or composed of — interest groups that benefit from the status quo, has not shifted decisively toward more reliance on consumer demand and investment by private firms. Instead, Beijing continues to goose short-term growth with loans to bloated state-owned banks and industries.