Abstract
China has been pursuing a development model that is based on supply side expansion, with high savings boosting investment at the expense of consumption. Hence, it has never developed a significant service industry or a financial system capable of channelling savings to consumption via a consumer finance framework. Domestic consumption deficiency has, in turn, pushed the bulk of the industrial capacity towards exports. Since the mid-1990s, when China’s exports became a critical mass in global trade, its economic growth has become dependent on the infinite capacity for debt-financed consumption by US households.
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© 2009 Chi Lo
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Lo, C. (2009). China After Subprime. In: Asia and the Subprime Crisis. Palgrave Macmillan, London. https://doi.org/10.1057/9780230251137_11
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DOI: https://doi.org/10.1057/9780230251137_11
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-31435-5
Online ISBN: 978-0-230-25113-7
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