The Chinese economy is in search of balance

Published on Author baiazbekovaa15

The Chinese economy is in search of balance – that is how analysts summarized the speech of the PRC State Council Premier at the Third session of the National People’s Congress at their 12th convocation, which opened in Beijing on Thursday. In the speech to almost three thousand delegates, Li Ketsyan again declared the need of carrying out structural reforms and modernization of society, having emphasized that transition from high growth rates of GDP to average ones (now called the “new norm” in China) is very favorable for this purpose.

“The deep problems connected with economic development of our society became more obvious. Difficulties, which we met this year, can be more serious, than in the past. The current year will become decisive to deepen comprehensive reforms”, he declared. 

The government intends to bridle the state monopolies and to liberalize tje banking system. As it is declared, the purpose of economic reforms is to transition from an investment model of growth to the development based on domestic [consumption] demand. Fighting against corruption and environmental pollution are additional priorities of the authorities in 2015.

The market of real estate slipped, which was still serving together with exports as the engine of economy. The example of that is the economic zone “Binhai” in the northeast city of Tianjin. It was desined to resemble East Manhattan, but numerous skyscrapers remain unfinished or empty. “Decrease in rates of economic growth of the Chinese economy in itself shouldn’t be considered frightening. In, whether the People’s Republic of China is capable to pass a question to other economic model successfully and to achieve industrial upsurge, whether it can take a way of technical and system innovations? In my opinion, the events still don’t inspire optimism”, – spoke a professor of the Beijing Institute of Technology.

The Chinese authorities intend to make use of “experience of the Shanghai free trade zone”, and also to simplify access to the Chinese market to foreign investors. And at last experts believe that the employment problem too can’t be dismissed: besides unemployment growth the high competition in labor market resulting in extreme low cost of labor is a potential source of social discontent in society.

One Response to The Chinese economy is in search of balance

  1. See previous blog posts on rebalancing.

    Do foreign firms shy away from investing in China? It doesn’t seem so, they clearly find ways around any barriers. In that case, new incentives and free trade zones are not likely to make a big difference!

    Note though Mr. Miller in his talk insisted that employment was not an issue, if you looked at the actual numbers — which he has but which journalists do not.