China in China

China’s economy has proven itself resilient and adaptable. During the financial crisis of 2008 the PRC stimulated the economy by investing in domestic infrastructure through the construction of roads, railways, and airports. They were able to increase GDP in a world economy that was plagued by recession. But now China faces a new challenge, choosing between rapid short-term growth or long-term sustainability. With an economy characterized by low interest rates and government subsidies irresponsible borrowing has become a serious issue. This economic system favors producers rather than savers forcing down household income resulting in relatively low household consumption.

The lack of domestic consumption in China has become their main concern. With the release of the 12^th Five-Year Plan outlining the reforms needed to rely less on exports and increase consumer spending economic change is underway. Will the world’s largest exporter be able to change gears so rapidly? Will she become an economy driven by domestic consumption rather than foreign consumption? Will China be able to shift from unsustainable growth to sustainability? Only time will tell, but with an eleven out of eleven on five-year plans and a ruthless business attitude the odds are in her favor.

Cited:

Amadeo, K. (3013, August 6). China's Economy. About.com US Economy. Retrieved October 23, 2013, from http://useconomy.about.com/od/worldeconomy/p/China_Economy.html

Pettis, M. (2013, September 2). China has a choice. Financial Times. Retrieved October 23, 2013, from http://www.ft.com/intl/cms/s/0/18446f64-11a7-11e3-8321-00144feabdc0.html#axzz2iegy5MSQ