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To piggyback on your point, Pettis lays out explicitly how China should shift to consumer-driven GDP growth... then also points out how politically difficult it
by ryandamm 9y ago
To piggyback on your point, Pettis lays out explicitly how China should shift to consumer-driven GDP growth... then also points out how politically difficult it will be (because it likely entails assigning losses to the wealthy and politically connected, via breakup of SOEs, transfer of wealth to households from the government, etc).
So yes, grandparent's point is correct, that there's room for consumer-led GDP growth. But the mechanism for how to get there is not easy. (And it's something Pettis has written about extensively.)
- mistermann 9y agoI'm probably a bit naive, but I don't really understand why it would be that difficult. You have an extremely hard working populace with powerful aspirations (viewing their countrymen who've risen up from poverty), they have the technology and manufacturing prowess, natural resources, political will and experience, money....if any country in the history of the world was in a position to do it, China seems like the very well best prepared by far. The biggest hurdles I can think of is the cultural propensity for corruption and excessive savings, far from insurmountable imho. Sure, it may not be "easy", but is it hard?
- yxhuvud 9y ago> political will No, they really don't have any political will to do anything about the SEOs. That is why their debt is still ballooning in an unsustainable manner. Just as Japan didn't, and the Japanese economy is still held back by keeping failing business afloat. The entrenched elite is just too strong, in both Japan and China. China may overcome the issues in a way Japan didn't, but the things you list apart from the political will (that they emphatically doesn't have) is plain irrelevant.