A Brief Guide To Why China Grows So Fast

OUTSIDE China, people tend to assume that the country’s impressive economic growth is due to exports.

As the chart below, drawn from our special report on China’s economy, shows, this notion has always been exaggerated and is now plain false.

China grows thanks to high levels of investment – far higher than those seen in previous Asian miracles such as South Korea and Japan.

The corollary of this is low levels of private consumption.

Some argue that this must lead to imbalances that one day will send China’s economy off a cliff. We disagree.


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