China’s Turbulent Half-Decade

China's Approach to Rebalancing: A Conceptual and Policy Framework

“…A very high investment share has been a feature of the boom-bust growth in other rapidly developing economies, such as Thailand in the 1990s, whose investment share of GDP peaked at 41.9 percent of GDP in 1991 (Huang and Wang, 2010). Although China has so far avoided a major slowdown or recession, cyclical overinvestment in certain sectors has been a feature of each boom, especially during the recent heavy-industry and real-estate investment booms of 2004-2007-2010(McKay, 2011. This high investment rate has increased macroeconomic pressures, especially inflation, which has led to social tensions throughout the first decade of the 21st century.…”

“…The current pattern of local government investment, especially its role in real estate investment and the high share of investment in heavy industry are key elements of China's cyclical macroeconomic imbalances, which have led to repeated overheating of China's economy during each phase of the investment-led boom(McKay, 2011). Moreover, the current pattern of local government investment, including the resources expended in speculative real estate investment, could be better directed to meeting the needs of urbanization for China's current urban and migrant populations by directing more expenditure to social housing, and educational and social services.…”

Australian Opportunities through the Chinese Structural Transformation

“…The nominal exchange rate against the US dollar was lifted gradually by a total of a bit over 17 per cent to August 2008, when the Great Crash lead to another fixed‐rate period until June 2010. The US dollar tended to be a ‘safe haven’ and strong currency during and through the immediate aftermath of the Great Crash, but by late 2009 was dragging the Chinese currency down against other currencies (McKay 2011). Since June 2010, the nominal value of the renminbi has been raised by a bit above 7 per cent against the US dollar.…”