China's Economhy - Is High Growth Sustainable?
6 important questions on China's Economhy - Is High Growth Sustainable?
In the 1990s, the Chinese economy became overheated; the inflation rose to 27%. How did Premier Zhu Rongji improve the economic situation (a 'soft landing' according to the author)?
Where does China's economic growth come from on the demand side?
- High levels of domestic investment
- High levels of domestic savings (+/- 50% of China's GDP!)
Why is the level of domestic investment high in China?
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Despite fixed investment, where do domestic opportunities for economic development lie in China?
- In rural areas and small towns, millions of peasants are in need of basic household consumer durables (refrigerators, cell phones etc.).
- The affluent urban middle class are shifting consumption patterns toward residential housing, household goods and automobiles.
- Services; e.g. education and domestic tourism.
Why should the Chinese economy rely on domestic demand instead of on external demand to generate growth in the long run?
How can China's economic growth be sustained viewed from the supply side?
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