Towards a ‘new normal’ growth strategy: China in comparative perspective

Abstract

China's move towards a new normal has been motivated by domestic factors and accelerated by the decline in export opportunities to developed countries. This decline, combined with the knock-on effects of China's growth adjustments, is disrupting the favourable external environment that made developing countries' exportled development strategies viable. This paper concentrates on a rebalancing of developing countries' growth strategies towards a greater weight of household consumption as a potential alternative and discusses three challenges -market size, domestic purchasing power and balance-of-payments constraints. Concentrating on the latter, it analyses changes in sectoral compositions of consumer demand and patterns of international trade. Results point to the risk that a shift in growth strategy causes an import surge. The paper's findings indicate the scope and speed of required product innovation that would prevent a rebalancing of growth strategies towards a greater role of consumption from running into balance-of-payments constraints.

Comparison of neural networks and regression time series in estimating the development of the EU and the PRC trade balance

“…Looking at the European Union's trade balance, we must say that it is unfavorable [8]. The difference between export and import is almost doubled in favor of imports from China [9]. In the years 2014-2015, exports grew by almost 16 percent.…”