China's Economy
Current Economic Challenges
Economic Transition
China is currently undergoing a transition towards an economy that relies on consumption and services, rather than the current system that relies on construction and manufacturing. This transition may become an issue, as corporate investment in new facilities and equipment is on the decline. (Euromonitor International, 2016)
Distribution of Income
Distribution of income in China is worsening. The division is most apparent between rural and urban households, where urban income is, on average, several times that or rural income. (Euromonitor International, 2016)
Debt
China's private debt is the world's largest. Corporate dept has been high for several years and continues to rise due to the dependence on credit creation. The debt build-up will have to end at some point, and it is expected that its end will substantially impact the global economy. (Euromonitor International, 2016)
Aging Working Population
Future growth in China may be limited due to today's working population. With 80% of the working age population currently employed, and the working age population falling, there is little to no room for employment gains that could lead to growth. Future increases in Chinese outputs must be the result of increased productivity, rather than increased employment. (Euromonitor International, 2016)
China is currently undergoing a transition towards an economy that relies on consumption and services, rather than the current system that relies on construction and manufacturing. This transition may become an issue, as corporate investment in new facilities and equipment is on the decline. (Euromonitor International, 2016)
Distribution of Income
Distribution of income in China is worsening. The division is most apparent between rural and urban households, where urban income is, on average, several times that or rural income. (Euromonitor International, 2016)
Debt
China's private debt is the world's largest. Corporate dept has been high for several years and continues to rise due to the dependence on credit creation. The debt build-up will have to end at some point, and it is expected that its end will substantially impact the global economy. (Euromonitor International, 2016)
Aging Working Population
Future growth in China may be limited due to today's working population. With 80% of the working age population currently employed, and the working age population falling, there is little to no room for employment gains that could lead to growth. Future increases in Chinese outputs must be the result of increased productivity, rather than increased employment. (Euromonitor International, 2016)
Header Image: "Currency, Chinese, Money, Yuan, 100, Notes, Paper Money" by Public Domain Pictures is in the public domain
Source: Euromonitor International. (2016, September 26). China: Country Profile. Retrieved from Euromonitor Passport database.
Source: Euromonitor International. (2016, September 26). China: Country Profile. Retrieved from Euromonitor Passport database.