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This is normal as world balance of trade is always 1 or 100% and exporters become importers through wage growth and employment until the cycle returns where the former producers switch again - like a fine swiss watch. So Chinese growth in the next 10 years at around 5,5% based on consumption, spending and wage growth but growth of the USA and EU based on exports to the giant consumer base in China. Keep an eye on that EU USA free trade agreement.

  • - Dominik
  • 23, Jul 2013 06:53 AM

Thank You for this article. I do see maybe something else here and is quite simple. China is maturing and being so, it is maturing as an economy but also through demography. Key difference between USA growth in the early nascent state mentioned and China now is its demographics - China has a slow population growth ( half of that of USA) that will mature rapidly with more urbanization, education and social rights. We know that CHina has extremely high savings rate per capita and will bring those down with more spending. Now, the key point is that China will continune its growth at 5,5% GDP annualy but with growth based on consumption and more importantly - imports. EU USA free trade agreement will allow EU USA block to overcome the economies of scale of China and pose a threat to Chinese value added exporters on one side and will bring down the EU USa produced goods to export to China - thus puting strains on China's BOP.

  • - Dominik
  • 23, Jul 2013 06:51 AM

@Mini Thank you Mini for your comment. Indeed we post links to our articles on our bcg.perspectives facebook page and encourage you to log on and share them.

  • - bcg.perspectives
  • 22, Jan 2013 11:47 AM

BCG Perspectives.... time to broaden your reach too. Is it possible for me to share this article on my facebook profile. What a brilliant read. Extremely well written.

  • - Mini
  • 16, Jan 2013 06:01 AM

An interesting perspective, The challenges today being faced are more on the social side : corruption slow burecracy,Crony capitalism, changing social norms, urbanisation and so on. This may take few years say 10 yrs in the meanwhile if the political impact is not handled rightly India can go the pakistan way. In the recent past we have seen the rise of fundamentalist groups (besides the Maoists) which have caused Blasts. If growth takes a back seat to politics and social issues. That to my mind is the Gravest challenge in India.

  • - Arise
  • 15, Jan 2013 06:52 AM