China: Economic Discussions Move Forward – but what about Reality?
Postat den 6th February, 2013, 15:54 av Hubert Fromlet, Kalmar
Developments in China get increasingly interesting for economists, other analysts, and – certainly – for many corporate decision-makers. This can particularly be said about:
– the more immediate economic development,
– economic reports and discussions, and
– the future economic policy of the new political leaders.
What concerns the first point, it seems to become increasingly probable that China is on its way to enter a period of somewhat accelerating rate of GDP growth. This was also indicated by Linnaeus University’s China Survey Panel in December. However, skepticism about Chinese GDP numbers and other statistics remains in place. Regular readers of this blog are familiar with the issue.
The second point to be mentioned is the trend of economic reports and discussions. Here, I can see continuous progress. Openness is improving, particularly in the past few years. After having followed economic reporting on China during at least two decades, current economic discussions seem to be on a very different – and more frank – level compared to 5-10 years ago (as long as it remains a pure issue of economics). The following headlines – which I just picked in the past two weeks – would probably have been distant from publication ten years ago (sources for the headlines: different Chinese newspapers – but the mentioned improvements have to be seen in Chinese relative terms, not measured according to our Western standards):
| ¤“UK breakup from EU may hurt China trade”: | China’s concern about this risk is obvious. |
| ¤“China must strive to improve WTO relations”: | China’s disputes with WTO should decrease. |
| ¤“China’s fiscal deficit may hit new high”: | a cautious warning signal about public debt. |
| ¤“The bane of private consumption”: | about the difficulties of changing the growth model. |
| ¤“Full RMB convertibility ruled out”: | indicating that full RMB convertibility is far away. |
| ¤“Domestic lenders need global outlook”: | pointing at an important management issue. |
| ¤“China’s Q4 property loans accelerate”: | could be a hidden warning signal. |
| ¤“Tougher measures on corruption”: | one of China’s most frequently discussed topics. |
| ¤“Food struggle may threaten urbanization”: | the food issue in another critical perspective. |
| ¤“Product quality improved in 2012”: | product quality – a major future challenge. |
| ¤“Manufacturing turns youth off”: | a topic that starts to reach China. |
| ¤“Chinese firms willing to do more public good”: | aiming at state-owned enterprises (SMEs). |
The third point is about the future economic policy of China’s new political leaders. The National People’s Congress (NPC) in March will certainly give hints on economic policy priorities. Such policy declarations are, however, usually without concrete timeframes – or held very generally. Consequently, one should not take these official ambitions for the future too verbally in all respects, even if they may indicate the road on which China’s new main political decision-makers wish to move forward.
Moving forward on a certain road does not say too much about real ambitions, speed and sustainability of the plans. This kind of more precise and applicable planning won’t be given already next month. It may be added as an example and little reminder that China’s already some years ago envisaged the transition to a more consumption-oriented economy. This strategy still remains invisible in reality. Rather the opposite is true when we look at the latest statistics – and probably in 2013 as well. Chinese reality remains many times very harsh – despite all progress we’ve seen in the past decade in quite some important economic areas.
Hubert Fromlet
Professor of International Economics
Editorial board
Det här inlägget postades den February 6th, 2013, 15:54 och fylls under China