China’s government-funded economic growth faces an "inevitable" slump because the country’s export-led strategy isn’t sustainable, Bloomberg reported, citing former adviser to the People’s Bank of China, Yu Yongding. Yu, a member of the Chinese Academy of Social Sciences, said the investment rate cannot increase forever and the "growth rate of China’s exports cannot remain persistently higher that that of the global economy." Expansionary fiscal and monetary policies have succeeded in arresting a fall in growth but the medium and long-term effects of the expansionary policies, including overcapacity and a decline in investment efficiency, are worrying, he said.
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