The Economist has a long article on China’s efforts to rein in its trade surplus and rebalance the economy toward domestic consumption.I’ll save you the drawn out reasoning, but here is the final ‘graph:
China’s recent efforts to boost domestic spending have helped to maintain robust growth and reduce its trade surplus. But excessive levels of investment are not a recipe for sustained rapid growth. Unless it is prepared to embrace difficult structural reforms and to allow the yuan to climb, China’s commitment to rebalancing will remain half-hearted. In the long run that will be bad news for China itself as well as for the rest of the world.
In other words, while they may be taking steps in the right direction, don’t expect miracles, like a China-led global recovery.
