As Vice President Biden meets with Xi Jinping and other Chinese leaders this week, his number one economic talking point is almost certain to be about “rebalancing.” Nearly all of Washington’s principal economic concerns, from currency valuation to Chinese industrial policy, touch this central issue. But, quite frankly, rebalancing is not just an American goal. It is, too, a Chinese objective because Beijing’s existing growth model—predicated on the two pillars of exports and capital-intensive investment—is delivering diminishing returns, and China’s savvy leaders know it.
A major new report from Eurasia Group, China Great Rebalancing Act, explains why.
First, a little truth in advertising: I’m the head of the Asia practice group at Eurasia Group, so I helped write the report. But our team’s report is well worth reading because it provides a very comprehensive overview of the forces and dynamics shaping the future of China’s political economy.