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China’s first quarter economic data is out and it is now possible to do an update on the progress economic rebalancing. For an explanation of these indicators and why they are important, refer back to our original post on the topic. 1. Urban Disposable Income Growing Faster than GDP Urban disposable income growth dropped sharply in the [...]
Hearing on China’s New Leadership and Implications for the United States - February 7, 2013 Economic Rebalancing in China: For the past several years China’s top leadership has repeatedly described the country’s current economic model as “uncoordinated, unsteady, imbalanced, and unsustainable.” This language is in sharp contrast to what has been a decade of apparent success: [...]
In 2012, Chinese commercial bank profits grew by 19 percent at the same time regulators increased the flexibility of deposit interest rates. The Peoples Bank of China should take this as an opportunity to continue to gradually liberalize interest rates. A double digit increase in bank profits in 2012 suggests interest rate liberalization should continue [...]
Hot off the press, here’s our new policy brief on economic rebalancing in China. The paper takes an updated look at the key policy reforms necessary to achieve economic rebalancing, sketches out a feasible rebalancing scenario over the next decade, and analyzes the domestic political challenges. As always, your public and private comments on this paper are [...]
With the release of fourth quarter 2012 economic data, we can give an update on the economic rebalancing in China. For an explanation of these indicators and why they are important, refer back to our original post on the topic. 1. Urban Disposable Income Growing Faster than GDP Urban disposable income continued to grow moderately faster than [...]
Michael Pettis’ new volume, The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy, is an important new take on the ramifications of global imbalances, in particular for China and the United States. The book sketches the familiar outlines of Chinese domestic and external imbalances, a sky-high investment share of GDP, [...]
One of the messages coming out of the new Chinese leadership is an emphasis on higher quality economic growth. This means moving past a simple emphasis on the headline GDP growth number and instead focusing on boosting living standards. This is embodied in the renewed emphasis on building a moderately well-off (小康) society and the [...]
The 18th PSC Brings Their Regional Experiences to the National Stage Last Thursday, China officially welcomed a new line up of leaders to form the 18th Politburo Standing Committee (PSC) of the Chinese Communist Party. The new recruits come from a variety of different backgrounds (economic policy, finance, state-asset management, propaganda, industrial planning, the oil industry) [...]
As a new set of leaders come into power in China, the question of economic rebalancing has come to the forefront. The current Chinese economic model is straining and a broad consensus has emerged amongst Chinese economists that more reform is necessary. The content and pace of this reform, however, is still very much under [...]
China’s capital-intensive firms struggle to manage the new world of slower growth There is much debate over the implications of rebalancing on China’s industrial sector. Over the past 11 years, the profit growth of industrial companies – one of the main benefactors of China’s investment growth model – averaged 33.3 percent compared with only an [...]