Slowdown in economic growth beneficial to China
However, these experts point of view is wrong. China’s economic changes that perhaps China and the world needs. Experienced multiple failed attempts in the last six months we have seen, is perhaps the much needed rebalancing the beginning of the process, it will change the over-reliance on the investment model of economic growth, increased to the tilt of the consumer.
This process will not be easy. シャネル 65095 ショルダー ブラック
The scale of China’s government debt in recent years rapid increase, if not quickly reversed many years of sustained over-investment trend, China will face a serious problem, and may even lead to a crisis – but the earlier the start of economic balance, the degree of the pain of the adjustment process will be the lower. However, the percentage of GDP of China’s domestic consumption is only just over half of the global average, the investment share of GDP was the highest in the world, so to achieve economic balance arduous efforts.
To enhance the consumer’s contribution to economic growth the proportion of the key is to raise the level of household income, change its percentage of GDP in the unprecedented low level of the situation. This requires raising the wage level, to revalue the yuan, the most important thing is that China should reduce the artificially low interest rates to the borrower, the residents pay huge amounts of invisible inflation tax.
However, these measures will lead to a slowdown in China. In particular, the financial repression tax “invisible,” is both a main cause of China’s economic imbalances, but also to promote the main factors of China’s remarkable economic growth. Forced to raise real interest rates, is the most important initiatives taken by the Chinese government to correct the imbalance in the domestic economy, reduce inefficient investment can.
The actual level of interest rates seems to do the rise. The Chinese government has already cut interest rates twice this year, policy makers, though reluctantly, but it faces enormous pressure for further interest rate cuts. The rate of decline of the level of inflation is much faster than the interest rate cut process in recent months, the actual rate of return to household savings increased significantly, the actual cost of the loan is also significant increase in synchronization. One of the most serious distortions in the Chinese economy is being amended.
But this had to reduce the growth rate of domestic investment, China’s GDP growth rate must also be decreased significantly. Many believe that the Chinese economy will continue to high-growth, late understand distortions in economic structures gave birth to such a high level of economic growth lead to adverse consequences, and finally realized that to achieve economic balance is how urgent. But they still do not understand can not be achieved in the high growth rate rebalancing. China’s investment growth rate of consecutive years of decline, the residents of revenue in GDP may reach a high enough level, thereby enabling the consumer to replace the investment has become the new engine of economic growth.
With the advance of China’s economy is rebalancing, the theoretically economic growth will slow, the actual level of interest rates will rapidly increase, which is what we currently see. We should not panic and asked the Government to reverse the process of adjustment should be China’s problem has finally started to solve Shu breath.
But the economic slowdown in China lead to social unrest, and other countries of the world economic situation constitutes interference? Controlled properly, this will not happen. Keep in mind that China’s economic rebalancing request residents’ income growth in China for many years more than GDP growth, even if China’s GDP growth fell to 3% – I think this would happen – as long as the income of residents to maintain 5 percent to 6 % growth level, it is far not lead to social unrest.
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