China’s Growth Strategy Is in Danger

By in

As of now, the Chinese economy is at a momentous moment in its modern history.

While being concerned with great power status, China has to be very strategic with its global risks, and avoid animosity over export-led growth while rebalancing its economy.

According to sources, China faces their biggest challenge which is to look towards 2050 and the ambitious goals of what the Chinese Communist Party and its leadership have called “China’s New Era”. However, the U.S., China’s most important trading partner, has thrown down the gauntlet of a possible trade war.

The future transition involves a full complement of internal changes directing to the structural rebalancing of the Chinese economy. This ranges from services to manufacturing, household consumption to export, from surplus saving to saving absorption and from market-based to state-directed resource allocation.

Exports still account for 20% of the GDP of the nation, or approximately half the share going to household consumption despite China being less dependent on the fluctuations of external demand than was the case before the 2008 global financial crisis.