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China's Reform Moment
Keywords:
After years of rapid growth and rapid rate of credit creation China's economy is stalling. Each $1 of new credit generates only 17 cents in GDP growth, according to Bloomberg. This compares with 83 cents of GDP growth for each credit dollar in 2007. Local governments cannot find projects that are worthy of investment. Financial repression with low interest rates for savers is further depressing consumer spending when it is needed to rebalance the economy away from exports.
China economc growth and recovery in 2013-2014
12/03/2012
Grouped Articles
Economists Trim China Growth Forecasts
Wall Street Journal 05/14/2013
Wall Street Journal 05/23/2013
Wall Street Journal 07/01/2013
U.S. Stocks Shrug at China's Woes
Wall Street Journal 07/10/2013
BofA Chief Says Fed Will Keep Pace
Wall Street Journal 11/07/2013
Xi Faces Test Over China's Local Debt
Wall Street Journal 12/31/2013
Growing Risks for the Chinese Economy going into 2010-2014
01/14/2010
One is a concern that China may like Japan in the 1980's is getting into a property and asset price bubble after aperiod of rapid industrialization and shifting of rural population to the cities. The risks of an overheating economy were growing with a 22% jump in a broad measure of money supply in March 2010.
Grouped Articles
Wall Street Journal 07/01/2013
I.M.F. Tells China of Urgent Need for Economic Change
New York Times 07/17/2013
Economist 01/14/2010
BusinessWeek 04/14/2010
Fear Pervades China's Stocks As Market's Gains Disappear
Wall Street Journal 05/13/2010
Europeâs Debt Crisis Is Casting a Shadow Over China
New York Times 05/17/2010
The World Bank and the Development Research Center (DRC) Report "China: 2030"
01/06/2008
A government Chinese think tank, the DRC, and the World Bank collaborate to write a report on the best future direction for China's economy. World Bank president Zoellick's suggestion for writing this report was endorsed by Li Keqiang, who will become the new prime minister of China.
Grouped Articles
Beijing Signals a Shift on Economic Policy
New York Times 05/24/2013
Wall Street Journal 07/01/2013
The Slowing of Two Economic Giants
New York Times 07/14/2013
Wall Street Journal 07/15/2013
Wall Street Journal 03/29/2010
Fixing a Perception Gap for the Underappreciated G-20
Wall Street Journal 08/27/2013
Financial repression and low productivity of investment in China
07/01/2013
Grouped Articles
Wall Street Journal 07/01/2013
China Will Keep Growing. Just Ask the Soviets.
New York Times 10/24/2014
China's difficult political-economic choices in the post 2010 period.
01/06/2008
The difficult choices in the new environment- transition to a new leadership, how to change the export model without serious disruptions, how to deal with western demands for balanced global growth, dealing with the inequality and corruption generated in the kind of growth China experienced (by the fiat of the State), opening up freedom of expression to curb corruption and to provide representation for hitherto blocked out voices, transition to freedom of expression and democratic processes without serious disruption to thegrowth needed for employment and improvements in the standard of living across all parts of society and regions, reducing or channelling to constructive ends prevailing nationalistic, anti-western or anti-Japanese sentiment. The new leadership of Xi Jinping and Li Keqiang is expected to be more outward looking than than of Hu Jintao and Wen Biao and comes at atime when China needs to make some difficult choices about future direction.
Grouped Articles
Wall Street Journal 07/01/2013
The Slowing of Two Economic Giants
New York Times 07/14/2013
Wall Street Journal 07/15/2013
How China Lost Its Mojo: One Town's Story
Wall Street Journal 09/16/2013
Chinaâs Economy, Back on Track
New York Times 10/04/2013
Xia Yeliang: The China Americans Don't See
Wall Street Journal 10/26/2013
New economic policies of the Jinping-Keqiang administration in China- 2013 -2014
06/24/2013
A shift in policies of the central bank, the People's Bank of China, tightening credit in June 2013 to send a signal to banks to improve the quality of lending. This is part of the effort to control the surge in lending that is leading to hidden debt and large amounts of loans in default in the poorly regulated shadow banking system which poses serious risks to economic growth.
Grouped Articles
Wall Street Journal 06/25/2013
China Central Bank Warns Banks on Liquidity
Wall Street Journal 06/25/2013
Credit Warnings Offer World a Peek Into Chinaâs Secretive Banks
New York Times 06/24/2013
Distress Signs Test Beijing's Resolve
Wall Street Journal 06/25/2013
As Markets Seesaw, Chinaâs Central Bank Tries to Allay Concern on Tight Credit
New York Times 06/25/2013
Wall Street Journal 07/01/2013
Tom Orlik on wealth distribution in China and why increasing consumer spending would require higher incomes for the lower middle class and rural households
01/07/2010
Orlik cites a study by a Chinese university which shows 10% of the households has over 80% of the wealth, and over 50% of the households have little or no savings. This suggests that there is not much room to increase consumer spending on education, healthcare, and consumer goods for these households as incomes are too low. This may account for the insecurity felt by a large majority of households about the future. It also shows that rebalancing the global economy would require rebalancing within China, reducing inequality and improving incomes for the middle class to increase consumer spending.
Grouped Articles
Wall Street Journal 07/01/2013
The Slowing of Two Economic Giants
New York Times 07/14/2013
Wall Street Journal 07/15/2013
New York Times 12/18/2011
Survey in China Shows a Wide Gap in Income
New York Times 07/19/2013
Wall Street Journal 11/06/2013
China's stalling economy and productivity growth- the need for new direction in 2013-2015
03/06/2012
Bloomberg estimates show every one dollar of new credit created now yields about 17 cents in GDP growth as old polices of state led growth are no longer working. This compares to over 83 cents in 2007. Financial repression by reducing interest rates for savers is further depressing consumer spending when it is most needed to rebalance the economy towards domestic consumption.
Grouped Articles
Wall Street Journal 07/01/2013
Wall Street Journal 07/15/2013
China Think Tank Offers Reform Wish List
Wall Street Journal 10/30/2013
China Forecasts 7.6% Economic Growth in 2013
Wall Street Journal 12/27/2013
Xi Faces Test Over China's Local Debt
Wall Street Journal 12/31/2013
Beijing Should Scrap the GDP Target
Wall Street Journal 01/08/2014
The broken link between credit expansion and GDP growth in China (1)
06/24/2013
Orlik and the editors of the WSJ point to the broken link between GDP growth and credit expansion. The IMF warns of increasing credit expansion. Stalling productivity growth and waste means every dollar of investment is bringing in less GDP growth. Stiglitz and Sen point out the need for improving other indicators such as healthcare, education and the environment as an overall guage of progress not just GDP growth. The new Chinese leadership is aware of the need for rebalance the economy towards consumer spending. Moves to reduce healthcare costs form the first efforts in this direction. Search terms "Orlik," "rebalancing."
Linked Articles
Wall Street Journal 07/01/2013
China's Silver Linings Playbook
Wall Street Journal 06/24/2013
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