Shoppers in Shanghai on December 1, 2021. China must engineer a surge in consumption growth so it replaces investment growth as a driver of GDP, but past experience shows just how difficult this is. Photo: Reuters
Shoppers in Shanghai on December 1, 2021. China must engineer a surge in consumption growth so it replaces investment growth as a driver of GDP, but past experience shows just how difficult this is. Photo: Reuters
Michael Pettis
Opinion

Opinion

The View by Michael Pettis

China must sacrifice GDP growth to rebalance its economy

  • China has little choice: it needs to transition from an investment to consumption-driven economy, even if doing so will be painful
  • Since boosting consumption until it surpasses investment growth is practically impossible, China will need to slow down GDP growth altogether

Shoppers in Shanghai on December 1, 2021. China must engineer a surge in consumption growth so it replaces investment growth as a driver of GDP, but past experience shows just how difficult this is. Photo: Reuters
Shoppers in Shanghai on December 1, 2021. China must engineer a surge in consumption growth so it replaces investment growth as a driver of GDP, but past experience shows just how difficult this is. Photo: Reuters
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