Do
not call data from China to the optimism, the Chinese economy is the
slowest pace of growth has scored in almost three years, and although
the growth rate of 7.6% (in the second half of this year) is a very
healthy global standards due to the experienced Western economies of
deterioration and stagnation, but it is without doubt a low Chinese
standards, which in turn cause for additional concern of the state of
the global economy, but the reasons for this slowdown and how to
confront it?
In fact, that this slowdown is not surprising if we consider the extent
of the Chinese economy's dependence on external demand and, therefore,
expected that China affected by lower demand in overseas markets,
particularly from the United States and Europe, the biggest consumers of
Chinese exports, in addition to slowing growth investment, especially
in real estate and related sectors.
Many of the slowdown attributed to patrol factors (Cyclical Factors)
linked to global economic developments and their reflection on the
inside, and called to take stimulus measures and increased government
spending, and indeed, the government has taken a series of measures to
stimulate economic growth, including reducing the interest rate and the
size of the required reserves of banks, but the problem, in the view
beyond cyclical factors to structural factors goes on the economic model
itself.
There is no doubt that the cyclical factors bear the brunt of China's
slowdown, but in light of the current model, and after three decades of
Alnmno close to 10 it is very difficult that the economy maintains this
pace, even without a global crisis, and what did the crisis in the fact
that it showed the need the face of structural factors are salt and fast
along with the financial and economic factors emerging policies of
supporting the government of urbanization and industrialization is no
longer sufficient to achieve growth rates higher than the 8% for a
decade as had been thought, even if the government has taken further
stimulus measures and increased public spending.
If we compare the reasons for the current slowdown to those that were
behind the slowdown that hit the Chinese economy during the crisis of
2008-2009, we find that the structural factors has deepened and become
more acute than it was three years ago, and is likely to continue to
track this over time.
It is true that stimulus measures from the expansionary fiscal and
monetary policies that will support economic growth in the short term,
but China will not protect against the fluctuations of global tremors,
and will not constitute an engine for growth in the long term, and,
therefore, China's success to achieve sustainable growth in the long
term depends on face the core of the Chinese economic model dimming on
external demand and public investment imbalances, and through the
adoption of a substantial economic and financial reforms.
These reforms include the existing tax system, which overwhelms
families and businesses, and allow private investment sector in sectors
controlled by states to increase their productivity and effectiveness,
and to expand the social safety net to include all counties (cities and
the countryside), which allows citizens to free up some of their savings
in banks and thus increase spending private, freeing up the labor
market to give up what is known through the system flowing families who
Asnev workforce between rural and urban, along with of course the
development of financial markets and to rely more on the bond market on
direct bank loans account.
To achieve a sustainable and stable growth is today considered the most
prominent challenges for China and most urgent, and does not face this
challenge in the long
Term stimulus measures progress and an increase in public spending,
while necessary at the moment, but the development of the economic model
towards strengthening domestic demand on the external account and
support private investment on government account.