 Can Consumption Growth in China Keep Up as Investment Slows?Mali Chivakul and Bernhard Kassner Munich Reprints in Economics from University of Munich, Department of Economics Abstract: China's exceptionally large share of investment in GDP has been widely noted. Rebalancing away from investment to consumption has been on China's agenda to realize more sustainable growth. As investment growth slows, the question is whether consumption could replace investment as a growth engine. This paper empirically explores the drivers of Chinese household consumption and specifically tests whether investment has affected household consumption beyond the standard income channel. Our empirical results using both national- and provincial-level data suggest that investment has had a significant impact on household consumption beyond the household income channel. The effects are particularly strong in the post-Global Financial Crisis period, suggesting that the Chinese government's stimulus measures, which aimed mostly at investment spending, have significantly affected households' decision to consume both through households' current and expected future income channel. Date: 2019 Published in Comparative Economic Studies 3 61(2019): pp. 381-412 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:lmu:muenar:78225 Access Statistics for this paper More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC. |
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