A pickup in China’s growth has fortified confidence the world’s second-biggest economy will avoid a precipitous slowdown as the past decade’s explosive growth decelerates to the 7% range.
China’s economic transformation since the 1980s has relied heavily on industrial investment and exports, but those engines have run out of momentum. Chinese export manufacturers are surrendering some of their low-cost advantage as workers demand higher wages. Industrial growth has been so intense that many industries now have too many factories and suffer diminishing returns on every dollar of new investment. The cost to the environment and public health has been high.
Now the government wants Chinese to save less and spend more to make the country’s consumers a bigger driver of growth.
This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.