Dunaway e Prasad - Rebalancing Economic Growth in China

Dunaway e Prasad - Rebalancing Economic Growth in China -...

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Rebalancing Economic Growth in  China A Commentary by Steven Dunaway, Deputy Director, Asia and Pacific Department and Eswar Prasad, Division Chief, Research Department International Monetary Fund International Herald Tribune  January 11, 2006  There has been much talk recently about stimulating private consumption in China, which is seen by a  growing chorus of policy makers and analysts worldwide to be an important means of reducing China's  growing external surplus. This discussion runs the risk, however, of prompting a string of ad hoc policy actions that could provide  temporary relief, but no lasting solution to fundamental imbalances in the Chinese economy. The real issue in China is how to rebalance the economy away from heavy dependence on exports to  lead growth towards self-sustaining domestic demand, including a substantial improvement in the  efficiency of investment. The recently announced revisions to the national accounts may make the levels of key macroeconomic  ratios in China look more reasonable, but the basic story will remain much the same: Gross national  saving in China amounts to more than 40 percent of gross domestic product, suggesting that Chinese  households are very frugal. Things are not quite that simple, however. As companies have improved their performance, corporate 
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Dunaway e Prasad - Rebalancing Economic Growth in China -...

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