Their customers’ economies teetering on the edge of what may be a prolonged period of low-growth signals that the time has arrived for China to accelerate a long-forseen transition in its own growth strategy; from export-demand driven to domestic-demand driven. But can the Beijing leadership do it? Now? Does it have the policy flexibility that the economic managers of the West do not?
Making that transition is not going to be easy. Apart from the limited economic options available to Beijing, there is a very muscular status quo in place politically. No one powerful in China is eager to sacrifice their advantages. State agencies—and the entrepreneurs in heavy industry and energy they support—want to protect the perks of access and influence they have earned. Well-connected exporters are not eager to see further RMB revaluation anytime soon, for that would further erode market share for them.
Extract from Russell Moses in the WSJ
A thoughtful and timely report. Well worth reading in full.