Overall growth picked up in November, due primarily to the strong service sector and revved up consumption. After seemingly waiting in vain for a meaningful boost from government fiscal and monetary stimulative measures, we are finally seeing those measures bear fruit.
Never before have China’s economic reforms been so precariously balanced between keeping prosperity robust for the masses and reining in excesses and imbalances from a supercharged decades-old industrial policy. Policymakers are attempting to fulfill two often diverging goals. Beijing is trying to stimulate growth just enough to hit around the target and keep employment stable without going too far and adding to the debt pile. And, at the same time Beijing is going through the often messy job of pushing reform and rebalancing policies that sink traditional growth drivers and risk crushing the economy. November data shows that these two goals are sufficiently being met for now.
That being said, while restructuring and stable growth is good for China, consumption and service booms cannot fill the void in global demand left by China's faltering industrial behemoth. China's contribution to global GDP at a robust 7% growth is a positive one mathematically, but the country's transition will continue to be a drag on growth for many economies worldwide.
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