China After Subprime

Chi Lo
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Chi Lo: Economic Strategist

Chapter 10 in Asia and the Subprime Crisis, 2009, pp 109-122 from Palgrave Macmillan

Abstract: Abstract China has been pursuing a development model that is based on supply side expansion, with high savings boosting investment at the expense of consumption. Hence, it has never developed a significant service industry or a financial system capable of channelling savings to consumption via a consumer finance framework. Domestic consumption deficiency has, in turn, pushed the bulk of the industrial capacity towards exports. Since the mid-1990s, when China’s exports became a critical mass in global trade, its economic growth has become dependent on the infinite capacity for debt-financed consumption by US households.

Keywords: Household Saving; Chinese Consumer; Fiscal Stimulus; Social Welfare Spending; Side Expansion (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-25113-7_11

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DOI: 10.1057/9780230251137_11

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