Can China Find Balance?

Can China Find Balance?

from The Diplomat by Jonathan Holslag

Since Wen Jiabao took over as China’s premier in 2003, one of his main objectives was to make China less dependent on capricious export markets. The economic crisis of 2007-2008 dramatically exposed the perils of export-led growth, as dozens of cargo vessels had to moor outside the port of Shenzhen in anticipation of new orders from the West and thousands of factory workers were sent home. Ever since, the government showed itself even more earnest in rebalancing growth. Program after program was launched to stimulate domestic consumption and curb overcapacity. It was therefore with great relief that Beijing could announce subsequent drops in the current account surplus. At last, China was inching towards economic graduation. A shrinking current account surplus doesn’t mean, however, that China becomes less dependent on exports. What it shows in the first place is that China has been importing more raw materials. Imports of oil and ores ... Read More...