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George Magnus @georgemagnus1
, 6 tweets, 2 min read Read on Twitter
Remarkable graphic showing that even though China rebalancing has made some progress, it is light years away and structurally a country mile from its developed and emerging peers. 1/n
Though China has GDP per capita about same as Brazil, its consumption per capita is comparable to Nigeria. Can you imagine? Not what you see in glitzy Shanghai or Shenzhen, but a truism regardless. Now look at the debate about rebalancing and reform, and you'll see.... 2/n
....the emptiness of the agenda on what's needed to really move China from top left to middle or bottom left in the chart (first tweet). Of course, as the investment rate drops away, pushing growth much lower, the Consumption share will rise, but that's just maths, and not... 3/n
...the point about proactive rebalancing at all. For this, we will need to see social security broadening and higher health, pensions and ed spending, opening up and new competition in service industries, income tax and VAT reform, local government reform.....4/n
....asset transfers from SOE's and privatisation, stronger commitment to private sector firms at expense of SOEs..... in short, few if any of the things that Xi's China plans or wants to do. 5/n
Source for all of this and more is
imf.org/~/media/Files/…, which is well worth a read, and I can't mention all this without drawing @Brad_Setser into this discussion, whose a tireless advocate for much of what IMF urging here. Sadly...it's a tiresome discussion too. Ends
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