While Chinese exports have been affected by the world economy, internal demand will see the country grow by 6.5% predicts the World Bank’s latest China Quarterly Update. “China is a relative bright spot in an otherwise gloomy global economy,” says the World Bank’s country director for China, David Dollar. “Shifting China's output from exports to domestic needs helps to provide immediate stimulus while laying the foundation for more sustainable growth in the future.” Spare capacity due to the lower growth rate is likely to lead to weaker marketbased investment, less job growth and migration, downward pressure on prices, redirection of exports to the domestic market, and import substitution in the coming years. Recent initiatives to stimulate consumption include improving people’s livelihoods by expanding the government’s role and spending on health, education, and social protection measures.
