Concerns over China’s slowdown and Beijing’s ability to manage the economy and its financial markets sent global markets reeling this summer. Nor are we just talking about the Asian economies so intricately locked into the global manufacturing supply chains that today nearly all end in China.
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But the thinly-traded stock market has only been a reflection of doubts overshadowing China’s economy, despite official growth rates of 7 percent. In many respects, it has caught up. READ ALSO: Indian economy offers hope as China struggles Such panglossianism (excessive optimism) studded with schadenfreude (pleasure derived out of others troubles) has raised a public debate, after the media hoopla, in the Indian society and academia, the newspaper known for its nationalistic views said. As more reforms and support measures are put in place, the Chinese economy is expected to maintain stable growth, it said.
Copper plummeted more than 3.5 percent, while mining stocks such as Glencore fell more than 10 percent. Services generally make up a larger share of GDP than manufacturing in advanced economies, because as wages and living standards rise in these countries, industrial production becomes less competitive.
“The United States, for all its differences with Beijing, should be rooting for China’s economic reformers to succeed”, he said. I encourage the United Kingdom business community to seize the opportunities and expand their co-operation with Chinese partners in trade, investment and financial services for win-win results. According to the National Bureau of Statistics of China, from 2010 to 2013, the average disposable income of the top 40 percent of earners rose more than 50 percent, from $4,753 to $7,170. Overcapacity in 19 industrial sectors in China is flooding global markets with cheap steel, tires, paper, aluminum, glass, solar panels, and other products. As total consumer demand grows and consumers move upmarket in their needs and tastes, businesses will have to increase investment in response.
“Either way, (the US and China) both stand to lose if communication doesn’t get much better … because of how quickly financial markets react to news or dearth of news”, Kennedy said.
There is much room for improvement on that front.
“China’s unwillingness to grant reciprocal market access and a continued pursuit of export-driven economic growth should not be rewarded with expanded access to the US market”, they wrote.
Far-sighted observers of the Chinese economy should be able to, as an old Chinese poem goes, “see beyond the floating clouds and appreciate the long vista” of a promising growth.
Speaking at a World Economic Forum meeting in the eastern port city of Dalian on September 9, Premier Li Keqiang sought to assure investors of China’s economic stability, but instead sent a mixed message about steps that the government has taken to keep problems in check. New government strategies will accelerate the upgrading of traditional industries, and expand the space for emerging industries including information technology, high-end equipment, new materials and biomedicine. Reform and opening up is China’s solution. Some of China’s most innovative companies – names such as Huawei, Lenovo, Alibaba and Tencent – need no introduction.
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Others see the handling of the stock market crisis and the economic challenges as a blow to confidence in the government. The current economic situation in China was one of the reasons behind the decision of the Fed not to raise interest rates last week.
