China's growth model, marked by excessive investment and a high savings rate, has led to the accumulation of local government debt and a skewed balance between consumption and investment.
In this episode of The Sound of Economics, Giuseppe Porcaro and Alicia García-Herrero explore this debt burden with Michael Pettis, exposing the structural problem in China’s growth model which over-relies on investment.
This episode is part of the ZhōngHuá Mundus series of The Sound of Economics.
ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe.
This is an output of China Horizons, Bruegel's contribution in the project Dealing with a resurgent China (DWARC). This project has received funding from the European Union’s HORIZON Research and Innovation Actions under grant agreement No. 101061700.