It is true that China’s growth pattern could, for decades, be characterised as investment-driven. By the end of that year, China’s rate of investment growth had surged to 30.1%, with total investment reaching 45% of GDP. Investment growth has fallen steadily ever since, amounting to just 3% last year, and has been consistently outpaced by GDP growth since 2017. And when it comes to real-estate investment, China’s rate is among the world’s highest (as a share of GDP). If China is to have any hope of achieving its target of 5% GDP growth this year, a more expansionary fiscal and monetary policy is essential.
