This article is the part 2 from Chapter 5 of Richard Heinberg’s new book The End of Growth, which is set for publication by New Society Publishers in August 2011. This chapter ‘Shrinking Pie: Competition and Relative Growth in a Finite World’ looks in greater depth at the prospects for further development in in an increasingly resource strained environment.
“China is far more dependent on exports and investment than Japan ever was, and the numbers are still moving in the wrong direction. Investment accounts for half of China’s economy while consumption is only 36 percent of GDP—the lowest in the world, drastically lower than even other emerging economies such as India and Brazil. But as the Japan example illustrates, low consumption leads to high savings, and China’s thrifty citizens, coupled with booming net exports, have bestowed upon the country the world’s largest current account surplus, triple that of Japan’s in 1985.”
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