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Global & Regional Focus Notes

03 January 2013
• Despite the unprecedented pace of economic expansion, China’s growth model has developed two significant imbalances, namely high investment and low consumption and a huge surplus in the current account balance.
• The global crisis has revealed significant weaknesses in China’s growth model, raising questions about the sustainability of China’s high economic growth rates. • China urgently needs to rebalance its economy, in an orderly way, away from excessive reliance on investment and exports towards higher domestic consumption.
• Such a transformation should make the country less susceptible to global trends and substantially boost living standards. It would also hold out the prospect for a more balanced and sustainable growth than the present model.
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