In a recent policy analysis Miguel Otero Iglesias explains how the Chinese economy is gradually rebalancing, but that for the foreseeable future investments (and not private consumption) will continue to be the main drivers of growth.
Summing up and analysing the key reform policies that have been undertaken since Xi Jinping took power, Miguel argues that China is rebalancing, but on its own terms and at its own pace. Rather than striving quickly for an economy led by by consumption and services, the current Chinese leadership is more interested in reforming and consolidating the economic, political and social structures that make such a growth model sustainable in the long term. In the short term the current model will be maintained. Those in the West who had high hopes that the market would play a more ‘decisive role’ in China will be disappointed. Most of the reforms will be inward-looking and gradual, and there is little doubt that the Chinese Communist Party (CCP) will retain a tight control over all main levers of the Chinese economy.
To download the full analysis as PDF file from the website of the Elcano Royal Institute think-tank, please click here.