Excerpt:

From the perspective of economic growth theory, there is no such thing as a purely “consumption-driven” growth model. Economic growth is primarily driven by capital accumulation, effective labor input, and technological progress. Technological progress, in fact, relies on investment. China’s rapid accumulation of capital has been a key factor in its rise as the world’s leading manufacturing power and its strong international competitiveness. This viewpoint is supported both by Marxist political economy and traditional Western economic theory. Consumption only stimulates growth when there is insufficient effective demand.