 |
| Arthur Kroeber |
Arthur Kroeber:
China still has potential for another decade of relatively high speed growth, but a combination of structural factors means that “high speed” in future likely means a trend GDP growth rate of around 7%, well below the historic average of 10%. Moreover, a combination of negative trends in demographics and the external sector, and the need to constrain credit growth after the enormous credit expansion of 2008-2010, mean the obstacles to realizing this potential growth rate are quite large. In order to overcome these obstacles, the efficiency of credit, and of capital more generally, must be improved. A large increase in credit efficiency was achieved in the previous economic deleveraging episode of 2003-08, but that increase in efficiency resulted mainly from an acceleration in GDP growth due to capital deepening, rather than from a constraint on credit. Over the next several years, the best that can plausibly be achieved is a stabilization of nominal GDP growth at approximately the current level. Any increase in credit efficiency must therefore come from a constraint on credit growth and direct improvements in credit allocation, rather than from capital-intensive economic growth.More in the Brooking's institute's paper.
Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.
Arthur Kroeber on China's economy in Storify.
Related articles
- Economy slows, but not falling off the cliff - Arthur Kroeber (chinaspeakersbureau.info)
- China will be a remote issue during the US elections - Arthur Kroeber (chinaspeakersbureau.info)
- Surviving the next China bubble - Arthur Kroeber (chinaspeakersbureau.info)
No comments:
Post a Comment