Is domestic demand beginning to drive the economy?
Welcome to this press briefing on the annual review of the Chinese economy. The so-called Article IV consultation. Here with me today is Mr.
You may have read the staff reports under embargo so let me remind you all that you know the documents as well as this press briefing are under embargo until 6 p.
July 27, Beijing time. So James will first highlight some of the key messages and then we will take your questions. Thank you, Ting, and thank you all for your interest. Let me just make a few introductory remarks.
The Chinese economy is performing well and reforms are making good progress. In particular financial sector derisking has advanced further. Credit growth has slowed.
Overcapacity reduction has progressed, anti-pollution efforts have intensified and opening up has continued. We welcome the governments increased focus on switching from high speed to high quality growth, in particular shifting from excessive debt finance investment to consumption will sustain growth together with raising living standards, a cleaner environment and much reduced financial sector risk.
Achieving this goal of high quality growth would be greatly helped by accelerating reforms in many areas. First, deemphasizing the growth target. Rebalancing the Chinese economy will likely mean somewhat overall slower growth.
This should not be resisted. For example with a credit fueled investment stimulus. Second, slowing credit growth. The credit growth has slowed in but it remains too fast. Slowing it further will require less public investment, tighter constraints on state-owned enterprises and curbing the rapid growth in household debt.
China's government should increase its social spending for example in health, education and social transfers and should finance it with progressive and green revenue sources like taxes on income, property and carbon emissions. Fourth, relying more on market forces. This means reducing the dominance of the public sector in many industries, opening up more markets to the private sector and assuring fair competition.
Fifth, accelerate opening up to the rest of the world. China's integration with the global economy over the last 40 years has lifted China from one of the poorest countries in the world to now an upper middle-income country and the world's second largest economy.
Yet, China's trade and investment regime remains relatively restrictive. Faster opening up would not only support China's own high-quality growth agenda but also benefit the global economy. Sixth and last, mobilizing policy frameworks. Financial sector reforms have made strong progress recently.
These should be continued. Monetary policy should continue to become more price rather than quantity based and the exchange rate should continue to become more flexible. The central government should share more of local government spending responsibilities, while increasing their ability to raise their own revenues.
Policy making would also be improved by strengthening China's relatively weak macroeconomic data. The Belt and Road Initiative is welcome and potentially transformative. Its success will be enhanced by having an overarching framework more focused on debt sustainability in participating countries and greater transparency.
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Now we can take your questions. Please identify yourself and also push the button to turn on the mic. One on the currency and one on reforms in general. Any thoughts on the recent movement in the currency? I mean, I think it has dropped to the lowest in about a year. Are the authorities, you know, is the PBOC proceeding as you believe it should and what do you think are the factors driving it?
On the currency, a few reflections. The first is you are right. By Chinese standards it has moved relatively quickly against the dollar in recent weeks but not by the standards of other emerging markets and if you look at the RMB on a trade weighted basis the movement has been much less.Find the latest business news on Wall Street, jobs and the economy, the housing market, personal finance and money investments and much more on ABC News.
The Chinese economy also recorded an impressive percent increase in growth last year, easily beating the government’s target of percent and the percent rate of growth in According to international estimates, China was responsible for approximately 30 percent of global economic growth in The socialist market economy of the People's Republic of China is the world's second largest economy by nominal GDP and the world's largest economy by purchasing power parity.
Until , China was the world's fastest-growing major economy, with growth rates averaging 10% over 30 years. Due to historical and political facts of China's developing economy. The China Economic Review publishes original research works on the economy of China, and its relation to the world economy.
We seek, in particular, quantitative and analytical papers dealing with institutional change, policy and performance of the Chinese economy ; research that compares the development process in China with that in other.
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