I came across a very interesting interview of Stephen Roach, Senior Fellow and Senior Lecturer of Global Affairs at Yale School of Management. He was asked about Chinas future economic growth and the impact it has on the United States.
One of his remarks stated that Chinas economy is dominated by two sectors: exports and foreign direct investment. However, the main defect is that there is little internal consumption. Policies need to be created in order to boost expenditure in the Asian nation. This could be achieved by investing in social securities, medical insurance private pensions, etc. More jobs should be generated and the government should also support the rural income. Many Chinese live in the poor countryside, having no exposure to goods and little opportunities. If China succeeds in stimulating internal private consumption, opportunities will arise for other nations such as the United States. American companies will double its exports into China, creating new jobs for both nations. This will cause a growth in the market competition and both nations will highly benefit.
Asia, in general, will be more balanced in the coming years. They are too dependant on the demand of the developed world, but it is time for them to figure out economic developments and put them in place in order to stimulate internal markets.