Shaping China’s New Normal – Consumption now ‘most exciting’ story

CHINA is undergoing a fundamental change to its economy while it attempts to grapple with longer-term fiscal challenges and potential political tensions.
It is in transition to a services-oriented and consumption-led economy, which will be reflected in a gradual change in China’s imports from the world.

And its growing and costly list of problems — including pollution, environmental degradation and ageing — will lead to creation of new service industries, such as environmental and healthcare services. For China’s trading partners, all these changes pose both challenges and opportunities.

ATI spoke to two professors of economics on the margin of a discussion panel organised by China Daily during the Asian Financial Forum in Hong Kong, seeking their perspective on China’s economy of today and tomorrow.

Both agreed that the days of double-digit, furious growth in China are unlikely to be repeated. What is now quaintly known as the “new normal” will be the norm.

In other words, the world needs to get used to China growing at a lower pace — as China itself also realises that it can grow at less than eight per cent without causing social instability . . .