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Prospects for Consumption-Based Growth in China

Author

Listed:
  • Christian Dreger
  • Yanqun Zhang

Abstract

The Chinese model for economic growth is undergoing a fundamental reorientation. While output has been driven by investments and exports in recent decades, private consumption is expected to become a major trigger for future GDP growth. However, the conditions for higher demand from households are far from optimal: the savings rate is high, driven in particular by the low level of social security and highly regulated financial markets. It remains to be seen whether the government can transform China into a consumer society without causing major friction.

Suggested Citation

  • Christian Dreger & Yanqun Zhang, 2014. "Prospects for Consumption-Based Growth in China," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 4(2), pages 3-6.
    • Handle: RePEc:diw:diwdeb:2014-2-1
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.437625.de/diw_econ_bull_2014-02-1.pdf
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    More about this item

    Keywords

    Chinese economy; savings rate; transformation and growth;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics

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