COLUMNS

China's Great Economic Rebalancing, Part 2: Potential Solutions

Sep 13, 2023 | 14:05 GMT

A truck drives between shipping containers at Nanjing port in China's eastern Jiangsu province on Aug. 6, 2023.

(Photo by STRINGER/AFP via Getty Images)

China's economic rebalancing is creating a host of issues. Most pressingly, government attempts to discourage overinvestment in the real estate and infrastructure sectors are slowing economic growth. Several short-term strategies are available to ease this transition, most promisingly an expansionary fiscal policy that increases private consumption. However, China will also need to make longer-term strategic changes to support its rebalancing, namely by creating alternative outlets for excess savings. Above all, these outlets will need to include more productive investment opportunities....

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