China’s Switch to a Consumption Based Economy Could Take 10 Years to Complete

China is undergoing a major economic transition that could last a decade. ‘China is moving from an industrial and investment led economy to a consumption led economy,’ said Chi Lo, senior economist of greater China at BNP Paribas Investment Partners, adding that China is only two or three years into the transition, which could span ten years or beyond. Lo said the transition brings about plenty of uncertainty along with joblessness from companies entering bankruptcy. ‘This is a creative destruction process,’ Lo said. Though amid the fall of some sectors, there will be a host of new companies and startups entering the market, Lo pointed out. Worries about China’s economy contributed to the elevated levels of volatility seen in global stocks so far this year. Investors worried that a slowdown in the world’s second largest economy could spark a global recession. But Lo said those fears were over exaggerated. TheStreet’s Scott Gamm reports from Wall Street. Subscribe to TheStreetTV on YouTube: http://t.st/TheStreetTV For more content from TheStreet visit: http://thestreet.com Check out all our videos: http://youtube.com/user/TheStreetTV Follow TheStreet on Twitter: http://twitter.com/thestreet Like TheStreet on Facebook: http://facebook.com/TheStreet Follow TheStreet on LinkedIn: http://linkedin.com/company/theStreet Follow TheStreet on Google+: http://plus.google.com/+TheStreet