In view of the preponderant role investments play at present in any development policy, it may well be worthwhile examining whether it would not be advisable in drawing up future aid schemes to lay greater emphasis on the stimulation of consumption.

This paper offers a theoretical basis for the concept of rebalancing and applies it to China, where it is currently a topical issue. Rebalancing here means the correction of economic and social imbalances built up during industrialization. This correction is accompanied by a structural...