BEIJING: Chinese economists believe that China’s growth has stabilised around 6.5 per cent (in line with its growth potential). The IMF echoes this view and expects the Chinese economy to grow by 6.8 per cent in 2018 and 6.5 per cent in 2019.
But other views on China’s growth in 2018 are less sanguine. Fixed asset investment was the most important driver of China’s growth for many years and generated almost half of all demand. Investment has recently become less important due to structural adjustments.
As pointed out by Martin Wolf many years ago, sustaining aggregate demand as investment weakens will be very challenging for policymakers in Beijing.
