BOFIT Weekly Review 2015/29
Structure of Chinese economy keeps evolving
Demand-side factors in the just-released 2014 GDP figures show that private and public consumption corresponded to over half of China’s GDP for the first time since 2006. Private consumption’s share of GDP has again begun to rise after several years of stagnation, while the relative importance of fixed capital investment continues to decline. Even so, Chinese fixed capital investment equalled over 40 % of GDP, which is remarkably high by global standards.
As economic emphases change, China is moving gradually from an export- and investment-driven growth model to growth based on the service sector and domestic consumption. In 2013, the service sector generated for the first time a larger share of GDP than manufacturing. In the first half of 2015, the service sector accounted for half of GDP.
The World Bank latest China Economic Update finds China has made progress in its attempts at economic reform. As growth slows in China, the assessment noted that reforms of the financial sector will require special focus, so that financing will be channelled to sectors that are capable of sustaining growth over the longer term. The World Bank continues to hold the view of continued modest slowing of Chinese economic growth.
Structure of Chinese GDP
Sources: CEIC, Macrobond