China’s investment-led, export-heavy growth model is, by its nature, anti-consumption. And Chinese leaders are beginning to understand they cannot change the model. This month, the official Xinhua News Agency issued a story with this headline: “China Plans Slower Growth in Domestic Consumption.” No, Beijing’s leaders are not planning a smaller contribution of consumption to GDP, but, yes, that is what is in fact happening. Technocrats can see what is about to occur: Chinese consumption is now on the verge of collapsing.
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