Economic Downturn a Moment of Truth for China’s Growth Strategy

Economic Downturn a Moment of Truth for China’s Growth Strategy

The Chinese economy, which has been a driver of global economic growth even as the United States and the European Union have worked to handle their own economic crises, is slowing down. Falling real estate prices combined with a decline in exports and consumer confidence have finally become barriers to growth in an economy that has long seemed unstoppable.

Headlines have warned of the ripple effects that a continued economic slide might have, and the two experts who spoke with Trend Lines said the downturn underscores the need for China to make some changes in its growth strategy.

Patrick Chovanec, an associate professor at Tsinghua University's School of Economics and Management in Beijing, China, said that it has long been known that China’s reliance on exports and foreign investment to drive growth is not sustainable, and that instead it must shift toward boosting domestic consumer demand.

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