Is China finally rebalancing?

How much progress has there been in efforts to rebalance China’s economy? US Treasury Secretary Tim Geithner is positive, saying that “it looks as if there has been a durable shift towards domestic consumption in China”, according to a report in the Financial Times this week. But the data show something else. Overall consumption growth did not increase last year, and private consumption almost certainly shrank as a share of GDP. Unless this changes, the external surplus will soon rebound.