Every economy, like every story, has two sides: supply and demand. The supply side of China's economy is the stuff of legend: 767m workers, perhaps $20 trillion-worth of machinery, buildings and other kinds of capital, combined with rapidly advancing techniques and technologies, many of them assimilated from abroad. This combination of labour, capital and know-how dictates how much the economy can produce. But whether it actually does produce all it can depends on the other side of the economy-the demand side-which reflects the spending decisions of consumers and investors. The supply side sets the scene; the demand side provides the drama.
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