China’s external constraints

CHINA FINANCIAL - Report 17 Nov 2023 by Michael Pettis

Special points to highlight in this report:

* We continued to see a slow recovery in growth in October along with, far more importantly, a slight improvement in the quality of growth, as consumption growth for the year outpaced GDP growth. But as always, nothing fundamental has changed.

* While China currently comprises 18 percent of global GDP, it accounts for only 13 percent of global consumption, and for an astonishing 31 percent of global investment and 30 percent of global manufacturing. If it tries to continue growing without a major shift in the distribution of growth (away from investment and manufacturing), its share of global investment and manufacturing will rise faster than its share of global GDP, and its share of global consumption slower.

* Unless the rest of the world takes steps to accommodate China by reducing its own investment and manufacturing (which is very unlikely), this will substantially worsen global imbalances in ways that are likely to make trade relationships around the world worse than they already are.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.