Posted 1/13/2024, 6:30:34 AM
China's Growth Model Faces Challenges as COVID-19 Exposes Overreliance on Exports and Infrastructure Investment
- China's economic rise fueled by exports, debt, and infrastructure investment; but growth was unsustainable and reliant on external flows
- COVID-19 disrupted China's external flows, forcing it to rely more on domestic consumption
- However, Chinese people are culturally frugal and saving more amid economic uncertainty, refusing to spend
- Xi Jinping wants control and stability over prosperity and reform; but an impoverished people cannot drive growth
- China faces contradictions in stimulating growth via debt/investment while reducing debt and needing private sector innovation