China’s Rebalancing: Recent Progress, Prospects and Policies
IMF Working Papers, November 12, 2018
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- China’s Rebalancing: Recent Progress, Prospects and Policies
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Bibliographic details
- Authors: Rui Mano, Jiayi Zhang
- Published: November 12, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484380673.001
Key findings
- While China’s growth gathered momentum in 2017, rebalancing was uneven and decelerated along many dimensions reflecting the temporary factors behind the growth pickup.
- Going forward, rebalancing is expected to proceed as these temporary factors recede, but elevated income inequality and leverage will remain a challenge.
- The authorities are already pursuing several pro-rebalancing policies which could be expanded to support each dimension of rebalancing while reducing trade-offs between them.
Challenges and prospects
- Uneven rebalancing: momentum in 2017 masked deceleration in many rebalancing dimensions due to temporary factors.
- Persistent risks: elevated income inequality and elevated leverage are identified as enduring challenges to rebalancing.
- Outlook: rebalancing is expected to continue as temporary growth-supporting factors fade.
Policy recommendations and measures
- Expand existing pro-rebalancing policies to support each dimension of rebalancing.
- Design policy adjustments to reduce trade-offs between rebalancing objectives (for example, between growth, inequality, and leverage).
- Strengthen policy coordination within a macro-policy framework to sustain rebalancing momentum while addressing income inequality and private debt vulnerabilities.
Source: China’s Rebalancing: Recent Progress, Prospects and Policies — Rui Mano and Jiayi Zhang (November 12, 2018).
Content in this bundle
- China’s Rebalancing: Recent Progress, Prospects and Policies, WP/18/243, November 2018