China's rebalancing efforts get an "F"

|By:, SA News Editor

Q2 data "paints a depressing picture of the progress of economic rebalancing in China," says the Peterson Institute's Nicholas Borst, giving the country's efforts an "F."

Particularly notable on the downside is residential real estate investment now outpacing overall GDP growth by a whopping 12 percentage points. "Given persistent reports of excess housing stock, it seems unlikely that this level of spending is justified by actual demand."

On the positive side: Growth in the service sector (8.3%) began to outpace that of the industrial sector (7.6%) - a trend if continued would have services eventually occupying a more "normal" share of the overall economy.

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