China's economic rebalancing from investment to consumption should produce stronger, sustainable long-term growth, the World Trade Organization (WTO) predicted Thursday.
The WTO said in its latest global trade outlook that China's rebalancing might dampen imports slightly in the short-run but it should produce stronger, sustainable growth over the long term, which would support more trade.
WTO estimated that in 2017, investment accounted for roughly 32 percent of China's gross domestic product (GDP) growth in 2017, down from 55 percent in 2013.
"This development may add some drag to world trade growth as China imports fewer capital goods, but the process has so far been gradual and not very disruptive to global trade," said the report.
Less investment could help reduce overcapacity in sensitive sectors such as steel and aluminum, thereby alleviating trade tensions, the WTO said.