When analysing China, I think there are currently three main themes to explore:
1. Can China sustain its remarkable growth rate of the past 30 years?
2. What are the implications of the structural breakdown of US-China relations?
3. How quickly will China integrate into global financial markets?
1. Can China sustain its growth rate?
China has delivered remarkable growth since the 1980s, and although its pace of growth has slowed since the global financial crisis, the country's overall contribution to global GDP has continued to increase. There is, moreover, room for it to grow further: while China's population accounts for roughly 20% of the world's population, its GDP amounts to around 17-18% of global GDP, and its exports account for 15% of global exports - so there is still room for further expansion.
There are three main challenges to China's future growth: 1) Debt and ageing; 2) Economic rebalancing; and 3) Statism vs innovation. Let's look at each of these in turn.
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