There is reason to believe that China’s supply-side rebalancing is moving in the right direction. But unless China’s leaders also tackle the challenges posed by market and bureaucratic inefficiencies, the objective of strong and sustainable growth will remain out of reach.
HONG KONG – Global markets have breathed a sigh of relief. Following the shock of the United Kingdom’s vote to exit the European Union, GDP data indicate that China’s economy seems to have escaped a slump, with annual growth averaging 6.7% in the first half of 2016. But that does not mean that China is in the clear. On the contrary, the success of the structural rebalancing that China needs to ensure sustainable long-term growth is far from certain.
HONG KONG – Global markets have breathed a sigh of relief. Following the shock of the United Kingdom’s vote to exit the European Union, GDP data indicate that China’s economy seems to have escaped a slump, with annual growth averaging 6.7% in the first half of 2016. But that does not mean that China is in the clear. On the contrary, the success of the structural rebalancing that China needs to ensure sustainable long-term growth is far from certain.