Li Xunlei, chief economist at the securities firm Zhongtai International, is among the most engaging proponents of economic rebalancing in China.
In the following article, he cites China’s World Cup qualification woes as among the consequences of a growth model that prioritises fixed-asset investment, but fails to generate sufficient household wealth or employment opportunities. In his telling, the financial insecurity which results from this model intensifies educational competition and pushes children towards pathways with clear career returns. Youth football participation loses out.
There are, in addition, more serious concerns than the poor performance of China’s first eleven. With returns on investment falling and growth in local government debt outpacing GDP growth, Li presses the case for an urgent shift towards growth anchored in household consumption. He argues that failure to carry out such a shift represents an obvious, but neglected, risk factor in China’s economy—what one m…