In addition to policymakers’ reluctance to slowed notably over the same time frame overstimulate, a worsening structural growth (Figure I-27). These developments will weigh outlook is expected to restrain the recovery in on productivity growth, a key determinant of 2023 and the growth outlook in the years ahead. potential growth rates. Also concerning is that Foreign direct investment flows into China over progress has reversed during the pandemic on 2017–2021 were significantly lower than they the shift from an investment-led economy to had been in the prior five years, amid a slowing a consumption-led one, exacerbating concerns globalization trend and rising geopolitical tension, about growth sustainability in the medium term. while the pace of private sector investment FIGURE I-27 Japanification warning signs, with rising concerns about long-term growth sustainability Foreign direct investment Ratio of private versus state investment net inflows percentage of GDP Consumption share of GDP – .  %  .% average – .  %  .% average Sources: Vanguard calculations, based on data from Bloomberg and the CEIC, as of October 31, 2022. 33