China Review News (CRN) recently published an article discussing the strategy for China’s sustainable growth after the U.S. debt crisis. The article pointed out two main challenges: (1) the investment-based growth model needs adjustment; (2) the export-oriented economy must change its focus to a unified domestic market. The article suggested that China has a similar debt risk from its large local government debt total of RMB 10.7 trillion. Meanwhile, currently, Chinese exports concentrate on sectors that have a thin profit margin; the large trade volume does not generate a high profit. The author concluded that, unless the current growth model switches to the domestic market, it will be hard to recover from the damage caused by the U.S debt crisis.
Source: China Review News, August 10, 2011