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AmCham China is pleased to invite you to luncheon with economist Nicholas Lardy. In his new book "Sustaining China's Economic Growth after the Global Financial Crisis", Lardy discusses the need for China to adjust its economic growth model.
China's stimulus program was successful in insulating China from the downdraft of the global financial and economic crisis. But it was not intended to address China's longer-term structural problems, notably the low share of private consumption and the super elevated share of investment in GDP; an outsized manufacturing sector and a diminutive service sector; and an increasingly high and probably unsustainable rate of investment in residential property.
China's stimulus program was successful in insulating China from the downdraft of the global financial and economic crisis. But it was not intended to address China's longer-term structural problems, notably the low share of private consumption and the super elevated share of investment in GDP; an outsized manufacturing sector and a diminutive service sector; and an increasingly high and probably unsustainable rate of investment in residential property.
Lardy posits that the key reform measures to address these imbalances are market-oriented interest rate liberalization, the reform of pricing of factors of production, notably energy, greater flexibility of the exchange rate, and a faster build out of the social safety net. To date vested interest groups have blocked these reforms, even some that have been on the agenda for years.
