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Video Economy Views: China's rocky road to rebalancing

 

October 14, 2015

 

 

 

In recent months China's stock market volatility and slowing economy have fuelled global concerns about its economic prospects.

Such developments may be concealing the fact that China has been undertaking a large-scale shift of its economy. The effects are beginning to show in domestic consumption and the services sector.

With the old export and investment led model reaching its limits and the unwinding of domestic overcapacities ongoing, China will need to continue to push forward with essential reforms. But the path to a new economic balance will not be risk-free. Nor will it be without effect for the global economy. Countries with trade links to China and commodity exporters are most exposed to a prolonged slowdown and rebalancing process. We will have to brace ourselves for a period of higher volatility.

 

 

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