How much progress has there been in efforts to rebalance China’s economy? US Treasury Secretary Tim Geithner is positive, saying that “it looks as if there has been a durable shift towards domestic consumption in China”, according to a report in the Financial Times this week. But the data show something else. Overall consumption growth did not increase last year, and private consumption almost certainly shrank as a share of GDP. Unless this changes, the external surplus will soon rebound.
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