Home > China, Income Distribution > The Economy of China’s West

The Economy of China’s West

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New economic policy in Beijing means the investment-driven boom of the west may slow down.

In the past the government would have bailed out struggling provinces by loosening the levers of investment. However, Mr Xi’s administration has signalled its reluctance to adopt similar methods, saying that it wants to lower investment as a proportion of GDP. The agenda associated with this goal, including plans to curtail local-government debt, reform state-owned enterprises and tackle industrial overcapacity, is likely to have a disproportionate impact on western provinces, whose economies are investment-led and state-dominated. Efforts to boost the role of consumption in driving economic growth will instead focus inevitably on the wealthier coastal provinces, which have larger consumer bases.

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Categories: China, Income Distribution
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