The key nature of the trend break in China’s economic model since 2014

China’s economic model has undergone a considerable trend break since 2014: Growth is no longer driven by exports, but by domestic demand. Domestic demand has since weakened , under the effect of problems in industry and the saturation of demand for some items. This has led to a stagnation of imports, which had previously been growing rapidly; The end of offshoring, the return to regional value chains and pessimism among many Chinese have led capital to flow out of China instead of into it, so China is losing foreign exchange reserves instead of gaining them. Th is trend break in China’s growth model has considerable implications for the global economy: Slowdown in global trade and in industrial activity in all countries; China no longer plays the role of lender for the United States’ deficits or provider of liquidity to the world.