, China

China must boost consumption: MorganStanley

Inflation, banking crises and slowing profit growth are economic symptoms which can still be remedied.

According to MorganStanley, China needs consumption. The credit-fuelled investment boom in the post credit crisis period has meant that capital productivity has suffered, resulting in symptoms such as inflation, banking sector asset quality issues and slowing profit growth. Against the backdrop of a slowing working age population growth and increasing sophistication of the workforce, the domestic demand alpha will come from consumption, which will also benefit as the economy moves up the value chain.

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