Economic Essay Example | Topics and Well Written Essays - 500 words - 7

Economic - Essay Example This paper explores the reasons why China’s economy might grow more slowly than it has in the last three decades. High dependence on investment for growth rather than consumption is likely to hurt China’s economy in the future. In the view of many economists, China needs to reduce this overreliance and rebalance in order to enable consumption to take control of the economy. The gross domestic product (GDP) of the country is mainly driven by consumption rather than investment. The annual GDP of China shows high potential of slowing in the future irrespective of the implementation of reforms (Tian Para 1). According to Robin Bew, a London-based Economist Intelligence Unit managing director, the Chinese economic growth is likely to decline to 7.3% in 2014. The rate of economic growth will slow further to 5.9% in 2018 and to approximately 5% after the next ten years, according to the EIU (Tian Para 5). Taking a keen look at the economy of China, one cannot fail to see looming signs of future economic doom. Banks have invested heavily into green energy project creating numerous corporations, which have in turn catapult China to the spot light as the world biggest producer of solar panels. High investments in the manufacturing sector have begun to take a toll on the country’s economy with bankruptcy hitting most banks that investment heavily solar panel manufacturing. The booming property market is growing in such a way that it seems to have surpassed government control. When the boom is finally over, anyone can only pray that China has a soft landing. However, the Chinese private consumption still remains the lowest when compared to major economies of the world. Unfortunately, there have been minimal attempts by the government to implement reforms that could reverse this trend. The Chinese government has practically balked at any possible reform that could boost consumption. The Chinese government policy is more of its old