This year, China's GDP growth rate
is expected to reach 10%. While some countries are still busy with the economic crisis and its consequences, China is once again the challenge is how to regulate the booming economy.
the decisive measures taken to prevent a housing bubble, China's real estate market has stabilized, then there will be further adjustments. This is the Chinese economy is good news, but some people may be disappointed, they thought the government would let them bubble growing until the final rupture.
property market adjustment will not impact on overall economic growth? It depends on what the definition of \Decline in asset prices may slow down the total investment and GDP growth, but only if the slow growth rate (assuming) from 11% to 9%, and that China can have sustainable high growth rate in the same time to prevent economic overheating. In fact, for China, 37% of the current real estate investment is an annualized growth rate of negative. This year, the ideal rate should be lowered to 27%!
China has maintained 30 years of rapid economic growth so far has not encountered significant fluctuations and interference. In addition to the Tiananmen crisis in 1989-1990, the economic slowdown, the average annual growth rate during this period is 9.45%, up to 1994 and 14.2% in 2007,
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growth in most major economies are experiencing the early stages of the crisis, but the situation in China seems to be unusual (or accidental), nor when the cause \These predictions have been proved to be wrong, but as long as China has been growing, there will be more people predicted doom will eventually appear.
unique in that macro-control in my opinion, the only way to sustained growth in China so special, is an effective macro-control during the boom.
, of course, economic development and institutional reform may lead to instability. In fact, the Chinese central government bearing the mantle of the planned economy, the growth plan is always unavoidably developed, resulting in fluctuations in the economy, which is in the early 1980s a major cause of instability.
but because of the central government must pay attention to the emergence of inflationary overheating, so the rise in unemployment caused by the bubble burst. Local governments and state-owned enterprises are not necessarily concern in this regard. They hope to achieve high GDP growth,
twins jerseys cheap, need not be too concerned about the macroeconomic consequences. They try to finance the ambitious investment projects, do not worry too much about loans and inflation.
In fact, the local government over-borrowing in the early 1990s is the main cause of overheating. The inflation rate soared to 21% in 1994 - is the highest level over the past 30 years - and a large number of local debt eventually turned into a non-performing loans, the mid-1990s state-owned banks accounted for 40% of total credit. With the local government since the 1990s, severe restrictions on financing capacity, this instability is now not so serious.
However, China's first generation of entrepreneurs of the \Sustained economic prosperity, continued revenue growth and continued market expansion, the development of the enterprise space. All are eager to seize new opportunities, all investors are eager to get rich quickly. They succeeded, and so far have not experienced the difficult times. Therefore, they boldly investment and speculation, not concern for risk.
lessons of Japan and Southeast Asia early
1990 the relatively high inflation as the central government sounded the alarm: the rapid growth will bring about macroeconomic risks. The early 1990s, the Japanese economic bubble burst, and the late 1990s, Southeast Asian economies, repeating the mistakes of Japan, so that the Chinese central government learned a lesson, the bubble is not never broken.
, the Central Government's policy has been a tendency to overheat when the brakes. The early 1990s, the implementation of stringent measures to reduce money supply and stop the over-investment, the vicious inflationary pressures down.
in the recent economic cycle, the central government's cooling measures already begun in 2004, when China had just 2003 SARS (SARS) caused by the recession recovery. The end of 2007, GDP growth rate of 13%, the Government of industries (such as steel) and asset markets (real estate) have adopted more stringent anti-bubble measures,
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According to economic theory, all the crises are caused by the foam or overheating, so long as they can successfully prevent the bubble, will be able to prevent the crisis. The \
I'm not sure whether the Chinese policy makers are familiar with modern economics. But they do seem more effective than some other countries - the latter in \
problem is that the world economy, all I remember until the crisis is the implementation of counter-cyclical policy of Keynes's teachings. In boom times,
nfl jerseys for sale, they asked laissez-faire policy of denying the appropriate policy interventions. In fact, handling and prosperity is more important,
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In my view, China's approach seems to create a real \.
perhaps China's economic growth will slow down due to other factors or interference. I can only hope that policy makers remain vigilant so that the myth of China's high economic growth can continue for another 10 years, 20 or even 30 years. Fan Gang is
of Peking University and Professor of Economics at the Chinese Academy of Social Sciences,
cheap barca jersey, National Economic Research Institute, China Reform Foundation Secretary-General, and the People's Bank of China monetary policy committee.
of: Fan Gang
English original title: The Chinese Economy's Secret Recipe
Copyright: Project Syndicate, 2010.
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