12/29/2015

Sustainable growth is in dire need for China

By Chua Chin Leng (chinadaily.com.cn)Updated: 2015-12-24 15:33


After three decades of double-digit growth, China has embarked on new development track with moderate growth rate around 7 percent annually. Even at this conservative growth rate, the Chinese economy could double itself in seven years to a US$20 trillion economy. It could be regarded as miraculous growth for a huge economy.

China has arrived at a point where rapid economic growth becomes a big challenge and risk overheating. In fact it was the fear of overheating that prompted the Chinese government to rein in the high growth rate.

China has little to fear of external factors dragging down its economy that is built on a very broad base of economic activities, from agriculture to manufacturing, tourism and finance etc. China has a lot of rooms to grow, and to continue growing at the new normal of a mature or maturing economy at 5 percent to 7 percent is not an issue.

The big question is whether China wants to push so hard to continue with its past growth rate of more than 10% or to take a breather and grow at a more leisure pace of 7 percent?

The last three to four decades of heady growth naturally led to many inequalities and inefficiencies in the Chinese economy like unequal distribution of wealth, unequal rate of growth across region, unequal growth in different industries and priorities. The inequalities itself would present great challenges but also opportunities for the Chinese economy to continue to grow as it seeks to level up these inequalities, diversify its industrial and manufacturing base, bringing growth and development to less developed regions and industries.

The obvious and often touted strategy to sustain a high growth rate is to steer the export oriented economy to raising internal consumption of consumer goods and services. The sheer size of 1.3 billion consumers, far more than the combined market of the US and Europe, would keep the Chinese manufacturers and producers very busy for a long time to come. China can be a self sufficient and domestic driven economy with the advantage of size.

There are also many industries that are still growing, such as the defense industries, pharmaceuticals and the redevelopment of the central and western regions of China. There are also many new industries such as renewable energies that could become the new engines of growth to keep the economy happily rumbling, albeit at a more sustainable and respectable growth rate.

And the banking and finance industry is just opening up and with great potential to contribute a bigger share to the economy.

The issue of the Chinese economy is not about growth but about sustainable growth, about managing growth for the good of its people, better distribution of wealth to uplift the well being of the population, to spread growth to all corners of the country.

The break-neck speed of the past decades of double digit growth should be tempered with more control in the direction of growth, in being selective of the industries to grow, in capitalizing on the green revolution, to turn green and the use of green technology.

China should take this opportunity to transform the economy and country into a country of the new century with measured and manageable growth, with a clear purpose and direction.
The author is a political observer from Singapore.

The opinions expressed here are those of the writer and don't represent views of China Daily website.

40 comments:

virgo49 said...

Singapore growth rate??

Hello, Central Committee. How many percent??

Or how many retrenchments or nicer term restructuring by next quarter??

Just nice enough Singaporeans to be fully employed without the refugees, you want 6.9??

Now water, everything also not enough, really itchy backsides.

Formed comittee after comittee to solve unnecessary chee kee luo like suai problems.

Veritas said...

The problem of China is similar to "middle income trap" which is a euphemism and distraction against real problem. When a country grows, so is special interest group, and roughly at the middle income level, the country will stagnate as all society surplus are siphoned leaving no capital for growth.

One good example is Malaysia and China is facing a similar problem.

How can China industry grow when people are laden with 30 year mortgages? When people do not have monies, companies go bankrupt. The "Say Law" which is later developed by Karl Marx pointed clearly the theory below.

When a capitalist make $100, he must pay his work $100 else, he will go bankrupt because no one buy his goods.

Inequality and low wages is inherently bad for a country.

But China is a little different in the sense that she need low wages to strip mine white man industries, and moving production to China. And after this phase, she need a U-turn of policy by increasing wages for her workers, while making sure the industries do not move out.

There is also a need to attack special interest group like landlords and their property bubble. In Singapore, property are allowed to rise faster than wages in order the parasite front run the workers.

In the phase of wage increment, wages must be allow to rise faster than property so that society surplus don go into landlord.

These are not rocket science but are low hanging fruits. Chinese leadership who are patriots and who love their country will be able to do that.

Veritas said...

The best way to correct property without hitting the people who invested their savings is by devaluating currency, meanwhile increasing wages. The end effect will be a real estate devaluation, and it seems that China is doing that.

The only one who got shit in this system are the elites, who see their real value of property vanish due to currency devaluation.

The real reason why PAP want strong Sing dollar is not to protect citizens, but to protect foreigners asset. A strong Sing dollar policy, stagnant wages, and high property inflation mean that Singapore future will be very bleak.

And right now, there is no way to change the Strong sing dollar policy because this is the cornerstone to attract foreign wealth to park in Singapore. And even there is property correction, it will hit the people hard.

Anonymous said...

In China, if the growth is not sustainable, it may lead to great political instability. The Chinese Communist Party's grip on power will loosen and Xi Jinping will be in great danger, politically and even his life, as he had made many powerful enemies in his corruption drive.

In Singapore, there is absolutely no danger to PAP and Lee Hsien Loong, even if economic growth come to a standstill. Because the opposition will still not be strong and united to be ready to be govt so PAP will win the elections with at least 90% seats by default. Simply because, save for Hougang and to a lesser extent Aljunied, majority (aka 70%) will never vote for political parties which are not ready to be govt.

Anonymous said...

should be anti-corruption drive in above 10:34 am.

Anonymous said...

But Singapore is different.
69.9% think they are the elites riding on the PAP gravy train, succoured and protected by the PAP, with privileges and perks made possible by the high rates of returns from their SWFs' long term investments.


Saycheese

Anonymous said...

"69.9% think they are the elites riding on the PAP gravy train, succoured and protected by the PAP, with privileges and perks made possible by the high rates of returns from their SWFs' long term investments."
Anon 10:41 am

Not really lah. Can you imagine what will happen if the 69.9% had voted for the opposition instead of PAP? And Low Thia Khiang as PM, when he himself said WP is not even ready to be govt? And WP Gerald also said WP will not work with other opposition parties to form govt?

Think about it. It is no laughing matter had the 69.9% voted for the opposition. I will emigrate even to Timbuktu!

Anonymous said...

@ VeritasDecember 29, 2015 10:22 am
//The best way to correct property without hitting the people who invested their savings is by devaluating currency, meanwhile increasing wages. The end effect will be a real estate devaluation, and it seems that China is doing that.

The only one who got shit in this system are the elites, who see their real value of property vanish due to currency devaluation.//

The most kong cum economics theory?

Likely to cause an "earthquake" in Milton Friedman grave?

And give (further) discredit to alternative views ( in the social media )?

Veritas said...

There is almost no alignment between my outlook, which is base on Marx with Friedman.

Today Friedman is already a dirty word, and he got discredited. Look at the disastrous FED policies which is base on his monetary theory.

The success of neo-liberal in policy influence is basically due to their ability in concealing their true intention- slavery.

Anonymous said...

@ VeritasDecember 29, 2015 10:22am
//The real reason why PAP want strong Sing dollar is not to protect citizens, but to protect foreigners asset.//

With such kong cum comments, even ( the late ) GOH KENG SWEE ( in his grave ) would "look down" on (daft) sinkies ( social media alternative voices )?

Anonymous said...

It revealed the poster thorough ignorance in the city of sins exchange-rate based monetary policies and the ( basic ) nature ( and characteristics ) of its economy?

Anonymous said...

@ VeritasDecember 29, 2015 11:26 am
// Look at the disastrous FED policies which is base on his monetary theory.//

Ha ha ha

This fella is a "total moron"???

If the ( unorthodox ) MP ( monetary policy ) since 2009 was disastrous, how could the FED FOMC on 16 Dec 2015 hike the interest rate ( the first since 2006 )?

Veritas said...

Modern economics theory is so well-developed that they are able to solve our economics malaise and bring good to people. Why is it not done? The reason is the greed of the elites, and their perpetual desire to enslave the people.

Many theory was masturbated and tweak to favor the elites.

During the Great Depression, John Maynard Keynes propose something similar to Friedman which is not being derided as "Fiscal expansion" theory. The outcome of Keynes proposal would be similar to Friedman with one special catch, the money expansion will go to useful labor and distributed to people, other than to banksters.

The effect was a destruction of the wealth of rich and narrowing of wealth gap. Today, economist forever want to bluff us why USA can escape Great Depression but from 2008 till now, nothing can be done.

Economist say there is WW2, so USA become good.

So why not bomb New York and Washington, so that USA can rebuild, that will make economy better. And Syria will have the best economy.


Anonymous said...

Dun change the topic!

Veritas said...

Capitalism which is after profit is among the worse form of system, far worse than command economy.

Before Hitler came to power in 1933, Germany is shit. By 1937, Germany is the strongest country in Europe. What Hitler did was to abolish the debt based monies and replaced it with interest free sovereign credit.

Bankers got fucked.

Immediately economy recover.

Actually Hitler did not intent to murder the Jews in Germany, but started his holocaust as late as 1942. I shall stop here.

Anonymous said...

YEW said:

Quote

" The real reason why PAP want strong Sing dollar is not to protect citizens, but to protect foreigners asset. "

Unquote

Do YEW not imply a weak ( SGD ) dollar is good for the economy ( and the masses ) in the long run?

Anonymous said...

How so?

Prove it!

Anonymous said...

Dun change the topic and talk about "narratives " .....

Anonymous said...

At the rate YEW digress, soon YEW will be out of this galaxy?

Anonymous said...

Stick to your "kong cum economics comments above " and back it up .....!

Veritas said...

A strong currency in theory is good. And every country that falls debase their currency. And fiat monies in theory work better than Gold Standards.

But what happen if the leaders screw people too much and there is a need to correction? A correction involve re-distribution of power and wealth and that is immensely painful.

The leaders can do it via wealth tax. Painful.

Or leaders can do it via currency debasement and redistributig the surplus gained from currency dilution to the people. More painless.

But right now the world leadership is doing the wrong thing. The world is in shit because of inequality, and the surplus of currency dilution goes to the 1%.

If Bernanke puts all his QE monies in everyone's account instead of giving to banks, USA would have recovered.

Anonymous said...

If YEW can't back it up ( with anything ), YEW will be ignored and "thoroughly look down by the economics architect " of modern sinkieland ( from the heaven )?

Anonymous said...

@ VeritasDecember 29, 2015 11:48 am
//If Bernanke puts all his QE monies in everyone's account instead of giving to banks, USA would have recovered.//


Halo .....

What ( "NONSENSE" ) YEW tawking without any ( empirical data ) backup?

The US unemployment rate ( u3 ) fell from about 10% in 2009 to 5% as of Oct 2015.

Anonymous said...

If that is not a ( total ) recovery, what is?

Mind YEW, the agreed NAIRU by the CBS ( Congressional Budget Office ), the FED etc is between ( 5 to 6 % )!

Hitting 5% ( for the u3 ) is already the the lowest the FED can tolerate ( before hitting the interest rate hike button )?

Anonymous said...

Whoever want to ding Dong with YEW can carry on .....?

YEW have proven to be an ( economics ) ignoramus?

A ( total ) waste of time to engage in an ( economics ) discussion?

Anonymous said...

There was a China TV talk show where a china lady asked a invited US lawyer (immigrant from China) on what would Apple do if it is a China coy? The China lady assumed that Apple China would go into China property business in order to make the fastest and most money.

The US lawyer said something that stunned most and no Chinese argued. He said that Apple China would probably copied the design from US coy in order to earn fast money without putting in research investment.

----------------
Same kind of talk show where a former China general was asked on PLA fighting strength vs US. The General defended on most issues. However one thing a Taiwanese news journalist question stunned the General is the lack of experience of PLA. A US battalion commander is above 45 yrs old while PLA is around 30+.
Another China journalist asked whether PLA senior frontline commanders need to pass "IPPT" like their USA counterparts. General was like.......
------------

Conclusion: Unless there is more transparency, no ones knows exactly what is happening inside China. Anti corruption exercise can be a excuse to uproot your enemy and reshuffle the cards.

In any case, China will need to go through the same growth problems like any countries. Once your product cost is higher than other country, the job will shift. Singapore (and a lot of other countries) learnt this lesson the hard way.

Anonymous said...

Anon 1:12, not to worry whether PLA can fight or cannot fight. Wait for another Korean War or a border war like the Sino Indian or Sino Vietnam war and you will know who is the better soldier. The truth is reality, not in Hollywood.

Americans can fight? They can't even fight civilian Afghans picking up a gun without much training nor the volunteer untrained soldiers of ISIS.

Compare the training and weapons of the American soldiers and the farmer Vietcong soldiers and the women in the rice fields and see who were the better fighting machine.

You think American soldiers are all Rambos?

Anonymous said...

anonymous 1.12

what if anti corruption exercise can be a excuse to uproot enemy and reshuffle the cards. -

isn't this same method of " electing new party into power" - "Reshuffling the card"-

you are so brainwashed with western propaganda.

it does not matter whether anti corruption campaign is genuine or not genuine, as long it remove corrupt official(high ranking), it is more than enough for ordinary people

in the democratic nation,so called genuine anti corruption campaign can only remove " low ranking official" - this is their biggest achievement

Anonymous said...

anon 1.12

highly trained, well experience US soldier lost to farmer in Afghan, Iraq.
highly trained, well experience US soldier to those Somalia rebel.


In the past, China scholar led army had defeated the Army led by a well experienced general.

Anonymous said...

Conclusion: Unless there is more transparency, no ones knows exactly what is happening inside China. Anti corruption exercise can be a excuse to uproot your enemy and reshuffle the cards. By Anon 1:12pm

What kind of transparency did you get from the Americans? Do you know how corrupt they are? Do you know what is going on in the White House and in the Pentagon?

Anonymous said...

Sinkies appear to know China, US and maybe other Civilizations very well.
But
how well do Sinkies know about Sin ?

Obama and Xi Jin Ping have no say over Sinkies nor are they able to help
us.
Sinkies have to depend on PAP and rightfully Sinkies should examine PAP and help it to be betterer in running Sin.

Please do tell what Sin would be like in
2016 and down the Road.
Not interested about SG 100 cos triple
confirmed not around anymore.

Anonymous said...

Tomorrow's war will be different in all aspect. In China's scenario vs US, it will be limited to air and naval conflicts where it will be a test of technology, hardware and strategy in the South China Seas for resource and lane controls. Otherwise China PLA should be like NKPA and not invest in J20/31, aircraft carrier, 96 subs, S400 SAM and 056D Destroyerrs since they have the largest army on earth and even their farmers can fight US.

US has already killed Saddam and Osama, also butted Iraq out of kuwait, control Saudi and intimidate Iran in the process. Probably also looted what they can (eg. summerian, Babylonian artificats if not oil). What else is there left to stay behind? For both Vietnam and Korean wars, check what were the casualty rates. Do you mean asian lifes (non white lifes) are cheaper? For Korea, look at South korea and North korea now. Who really won the war?

Invasion for the motherland is different when fighting in foreign soil.

Anonymous said...

Now it is the Wenzhou gang against the Shanghai gang. BTW all of them got very strong background militarily and are very rich.

Chinese people know these very well and history always repeats itself.

Remember why CCCP defeats KMT? Corruption. China People supported CCCP because a lot of people are poor and were peasants then. Communism is what they believed in where everybody is equal. However look at what is is of China now. If corruption is not eradicated, there will be instability and that is what the West wants.

Whatever it is CCCP are not elected by people. Whatever state we sinkies are in, we chose the path ourselves.

Anonymous said...

Let me give you further examples on why experience counts:

1) See the youtube video on BBC UK cadet exchange in China.
https://www.youtube.com/watch?v=9Y3sJ2LxOPY

At 16min 10sec, during a exchange btw the cadets. UK sandhurst cadet says he is granted more freedom in UK. The China cadet was asked why china cadet does not have more freedom. China cadet reply : obey. Just obey. Later on the cadets went on topo exercise.... see for yourself the results.
Maybe and hopefully these does not reflect the truth.

2) During typhoon season in South China Sea, chinese engineering ships captain need to seek permission to evacuate in order to evade the typhoon. Western engineering ships captain made their own decision and no need to "obey".

Anonymous said...

Like Singaporeans, just obey.

Anonymous said...

anonymous 11.29

bbc uk cadet exchange - TYPICAL Western PROPAGANDA over over exaggerated " freedom"

UK cadet dont need to obey the order of UK superior, UK law, UK govt?

Why was UK people sent to jail? for violating the order.



Anonymous said...

the main difference between Chinese soldier (qing dynasty) and western troops (brutish)

western troops are professional army (strict discipline)- " indoctrinated to obey the superior)


Qing troops often ignore order of their superior and behave like bandits.

Anonymous said...

please send singaporean most famous rebel kid, AMOS YEE to UK cadet

let me see whether UK military camp would tolerate his freedom , his criticisms

i am sure that BBC wont make such documentary

where singapore cadet complained about

Uk cadet dont enjoy freedom. UK cadet are brainwashed to obey the UK military rule, law, and superior.

Chua Chin Leng aka redbean said...

Ahem, I was trained in UK with the British cadets.

Anonymous said...


Watch the video fully 1st before commenting.
Propaganda or not - you decide for yourself.

Discipline and ability to make out of the box field decisions (training to train on this ability) could be two different thing.

"UK cadet dont need to obey the order of UK superior, UK law, UK govt?"
People who went through NS should know this very well unless someone joined the farmer armed forces.....