China's Economy in Transition

Chinaâ??s current account surplus has declined to around one-quarter the peak reached before the global financial crisis. While this is a major reduction in Chinaâ??s external imbalance, it has not been accompanied by a decisive shift toward consumption-based growth. Instead, the compression in its external surplus has been accomplished through increasing fixed investment so that it is now an even higher share of Chinaâ??s national economy. This increasing reliance on fixed investment as the main driver of Chinaâ??s growth raises questions about the durability of the compression in the externa