01718cas a2200241 a 4500 AALejournalIMF004615 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451865516 1018-5941 BD-DhAAL BD-DhAAL Aziz, Jahangir. Rebalancing China's Economy : What Does Growth Theory Tell Us? / Jahangir Aziz. Washington, D.C. : International Monetary Fund, 2006. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper uses the standard one-sector neoclassical growth model to investigate why China's consumption has been low and investment high. It finds that the low cost of capital has been quantitatively an important factor. Theory predicts that the price of capital may have been significantly distorted in the 1990s and 2000s. The distortion could have been caused by nonperforming loans, borrowing constraints, and uncertainty over changes in government guidance in bank lending. If China is to rebalance growth towards relying more on consumption and less on exports and investment, banking sector reforms and financial market development could, therefore, turn out to be key. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2006/291 Full text available on IMF http://elibrary.imf.org/view/journals/001/2006/291/001.2006.issue-291-en.xml IMF e-Library