China’s government tries to shift its economy from investment-driven to consumer-driven, but the latest figures suggest that push is not yet having the expected results, says business analyst Shaun Rein in the Voice of America.
The Voice of America:
The continuing slowdown comes as Chinese leaders push through measures aimed at rebalancing the country’s economy, diminishing its reliance on manufacturing for exports and government investment in core industries.
Shaun Rein, managing director at the China Market Research Group, says that the latest data show China’s economy is still overly reliant in investments in physical assets, such as real estate and infrastructure.
“Fixed asset investment grew 20.1 percent year over year, that is still far too high, we should be more on the 18 to 19 percent range,” he said.
Rein says that more of the economy needs to depend on consumer spending and the latest figures show that may be happening. Retails sales grew 13.3 percent in the first half of 2013 – an indication that consumers are starting to account for a bigger slice of GDP growth.
“You still see continued consumer confidence, continued spending going forward,” he says, “but it’s not an easy switch and there will be pains in the economy going forward as we make that shift.”
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