This policy brief draws on FESSUD Working Paper No. 144, “Assessing China’s Economic and Financial Prospects within the Context of Global Imbalances”. It highlights how the country could rebalance its economy over the next 10 years and thereby helps to improve global economic and financial imbalances.
The present policy brief begins by outlining a baseline scenario that depicts the projected trends in GDP growth and current-account balances across major countries and blocs of countries for the 10-year period between 2017 and 2026. Such a scenario assumes no major policy changes.
It then compares these projected trends to those generated by assuming that China would move more aggressively to rein in its current-account surpluses and increasingly rely on increases in domestic consumption to drive its economic growth. This second projection is labelled an Alternative Policy Scenario. Both scenarios are generated by the global stock-flow consistent Cambridge-Alphametrics Model (the CAM).
Download policy brief: ‘Policies for Rebalancing China’s Economy and Their Global Impact‘