Quotation Sturn, Simon. 2014. From internal imbalances to global imbalances: A survey on the causes of China's export-led growth. China Economic Journal 7 (3): S. 320-342.




There is a broad consensus that Chinas export- and investment-led growth model is unsustainable and therefore needs to become more balanced. In the public debate, Chinese exchange rate interventions are mostly made (solely) responsible for this. But it is unclear whether and how much the Renminbi is undervalued, and if an exchange rate appreciation helps to reduce Chinas current account surplus significantly. This survey reviews the international literature on Chinas export-oriented growth model. Internal structural imbalances in the Chinese economy, resulting in an extremely low consumption-to-GDP share by historical and international standards, play hereby a central role. Related to this are: 1) the drop in household and wage income as a share of GDP and low employment growth, and its impact on consumption demand; 2) the increase in income uncertainty and inequality, and its impact on household savings; and 3) the role of government spending, i.e., high and increasing public surpluses. The central policy challenge is therefore to increase household incomes, and to reduce income inequality and uncertainty.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal China Economic Journal
Language English
Title From internal imbalances to global imbalances: A survey on the causes of China's export-led growth
Volume 7
Number 3
Year 2014
Page from 320
Page to 342
Reviewed? Y
URL http://www.tandfonline.com/doi/abs/10.1080/17538963.2014.947706
DOI http://dx.doi.org/10.1080/17538963.2014.947706
JEL D1, D3, E2, F00, F31


Sturn, Simon (Details)
Institute for Ecological Economics IN (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5300 Economics (Details)
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