The Chinese economy: stimulus without rebalancing - China remains hesitant about rebalancing its growth model towards greater consumption
The Chinese government seems convinced that the current growth model, which moves away from the debt-driven reliance on the real-estate sector and focuses on increasing China’s global market share of industrial production and exports, remains the right one. In other words, the need for rebalancing towards consumption does not seem to be a real priority.
The ongoing stimulus is directed mainly towards infrastructure, meaning that no significant near-term surge should be expected in global demand resulting from increased Chinese consumption. In other words, the global rebalancing the US and the EU are expecting from China will not happen soon.
About authors
Alicia Garcia Herrero
Chief Economist for Asia Pacific at Natixis, Senior Fellow at Bruegel, Non-resident Senior Follow at the East Asian Institute, Adjunct Professor at the Hong Kong University of Science and Technology
Economist specialized in monetary and financial issues in emerging markets, banking crises and resolution strategies, financial development
Jianwei Xu
Senior Economist for Asia Pacific at Natixis, Non-resident Fellow at Bruegel
Specialist in international economics, labour economics and Chinese economy