Fed Vice Chairman and Former MIT Macroeconomist Stanley Fischer on Emerging Asia:
http://www.federalreserve.gov/newsevents/speech/fischer20151119a.pdf
China’s Economic Rebalancing
Yale economist Stephen Roach notes:
“… But there is a
third area of focus in the new 13th Five-Year Plan that breaks from the recent
past – a willingness to up the ante on the social safety net as a catalytic
force in turbo-charging consumer-led rebalancing. While the 12th Five-Year Plan
was effective in laying the groundwork for this transformation – mainly by
boosting the personal income share and fostering an increasingly services-based
industrial structure of the Chinese economy – it was not effective in moving
the needle on private consumption. Services are now more than 51 percent of
Chinese GDP – up markedly from the 44 percent share at the onset of the 12th
Five-Year Plan in 2011 – but private consumption has only inched up to 37
percent of GDP from 35 percent over the same time period. The disconnect
between solid growth in services and labor income generation, juxtaposed
against minimal growth in discretionary consumption, stems largely from
understandable fears of an insecure future which continue to grip Chinese
families. As a result, newfound income continues to be skewed more toward
saving rather than spending; the saving rate of urban households exceeded 30
percent in 2014 – up significantly from the 24 percent rate a decade earlier.”