In other words, rather than shifting from investment led to consumer led growth, China appears to be continuing along its investment led growth track.

Domestic demand led growth will be a more reliable strategy than export led growth.

Seduced by China s spectacular growth, the region shifted from US to China centric export growth.

Is Export Led Growth Passé?

The lesson is clear export led growth is the way to go.

To be specific, we need to foster growth, based on increased investment.

In an optimal world, the surpluses of countries pursuing export led growth would be willingly matched by the deficits of those pursuing debt led growth.

We share the distinction made in the report between growth and development.

A shift to services led growth and an innovations based development strategy were highlighted.

In China, November s Third Plenum of the Communist Party Central Committee will show whether China is serious about reforms aimed at shifting from investment led to consumption led growth.

Domestic demand led growth will be a more reliable strategy than export led growth. That means that countries with a large domestic market and a prosperous middle class will have an important advantage.

But exchange rates do affect the pattern of growth, and it is in China s own interest to restructure and move away from high dependence on export led growth.

The United States is likely to have a different problem with consumer led growth in China.

I call today s growth pattern the business as usual option the smart technology growth pattern, by contrast, represents the sustainable development option.

As a result, there are now major questions about the sustenance of China's long powerful export led growth model.

Worse still, economic growth based on exports of natural resources has proved unsustainable.

Since then, China has aggressively pursued a fast growth, export, and investment heavy model of economic development.

Most important, export led growth must give way to domestic economic drivers.

Policies aimed at ensuring export led growth also include export subsidies and barriers to imports.

After all, export led growth policies can succeed only if other countries are willing to run deficits.

Under these conditions, export led growth by major economies is a threat to the world economy.

Reserve accumulation was also a by product of China s deliberate currency undervaluation to promote export led growth strategy.

Growth that relies on capital inflows or commodity booms tends to be short lived.

Equally noteworthy is the contrast between the decline in population growth rates and the absolute increase of population.

All countries had a responsibility to govern well, invest in their people, and establish the foundation for market led growth.

Now China must choose between the export based, investment driven growth model of the past and a new, more viable economic order.

In particular, slowing global economic demand poses daunting challenges for many Asian economies, especially those that are more dependent on export led growth.

But then critics shift ground and argue that trade driven growth benefits only the elites and not the poor it is not inclusive.

Export led growth meant that China could produce without worrying about developing the domestic market.

This investigation and criticism of Germany s export based growth model has incited outrage in Germany.

Provided that South South trade linkages are reinforced, one might see a new round of successful export led growth in smaller countries.

Developing countries can thus sustain service led growth, given the huge room they have for catch up and convergence.

The boom began in the countryside in the late 1970 s and 1980 s, and was followed by today s urban, industrial led growth.

RBE Resource Based Economy

Resource Based Economy

And an unwillingness to trade away export led growth is having the same effect on the East s surplus countries (especially China).

The formal sessions played out predictably, placing great emphasis on the coming structural transformation of China s growth model a colossal shift from the all powerful export and investment led growth of the past 32 years to a more consumer led dynamic.

Employment in the manufacturing sector has tended to increase (as a share of total employment), even in India, with its services driven growth.

In essence, it will cover poverty alleviation and sustainable development and will facilitate the enabling environment and policy reform needed to encourage market based growth and income generation.

What is a resource based economy, and how does that compare with a monetary based economy?

It requires an industrialization drive, accompanied by the steady accumulation of human capital and institutional capabilities to sustain services driven growth once industrialization reaches its limits.

Worse, we are treating the present as if the bubbly growth from 2000 to 2007 will return.

As a result, investors are worried that China could slip into the excess leverage growth model that has served many developed economies so poorly.

Indeed, strong Chinese demand has supported its trading partners export led growth for much of the past three decades.

Service led growth is sustainable, because globalization of services, which account for more than 70 of global output, is still in its infancy.