She still overshadowed in the past six months5 million thirty years ago today they are 3Its leaders were apparently able to reassure investorsBarack Obama leads all right to socialismThe slightest electoral law is still debateAnd the American Dell could follow them suitIt must also have strong qualities of ManagerBeing a former represents an enormous responsibilityIt appears that the largest bidders in this operation are collectors for a long time It does not sell by vocation but by dutyWen Jiabao, Chinese Prime Minister, has detailed, at the Davos Forum in Switzerland, his plan to counter the global economic meltdown expenditures and public loans. It has more or less guaranteed that annual growth in China would remain above 8. But the Chinese Government really means to keep its economy afloat It is not clear.
Chinese exports were hit head-on by the deepening recession in the United States. Therefore, some areas of coastal China, once successful, today resemble ghost towns and tens of thousands of workers are left in their village. In Beijing, koreatown, which housed some 250,000 people mainly workers (and their families) paid by Korean companies producing goods for export China, saw more than half families to return to South Korea.
With 2,000 billion in foreign exchange reserves, China largely has the means to finance a massive increase in government spending and lending last recourse to banks.
But there is a problem. Even if it encounters a success in the short term, the substantial transition to an increase in public spending will result sooner or a decrease in growth rate later.
In other words, it is not clear that minor infrastructure projects worth be built, given that China already invests more than 45 of its income, including a large part in infrastructure. It is true that part of the Chinese tax incentives provide loans to the private sector through the banking sector closely controlled.
But how do I know if these new loans will go to projects that are worth the penalty or, more likely, to borrowers who have good political relations
In fact, the economic success of China is based on the maintenance of a balance between the Government and a private sector in expansion. Strongly reinforce the already excessive presence of the Government in the economy will destroy this delicate balance.
It would be preferable that China find a way to replace U.S. private consumption by domestic consumption, but its economic system seems not capable of a rapid transition in this sense. If public spending must be the vector of the recovery, it would be better while the Government invest in schools and hospitals rather than in "bridges to nowhere". Unfortunately, Chinese local officials must Excel in the "competition of growth" of the country to be promoted. Schools and hospitals do not generate the kind of rapid tax income to supplant his political rivals.
Before even the beginning of the global recession, there were several good reasons to doubt the sustainability of the Chinese model of growth. The degradation of the environment is obvious. And economists have calculated that if China continues to show a fast growth rate, it will soon be such proportion of the world economy that it will not maintain its current level of exports. A transition to the development of domestic consumption was inevitable the global recession made that put the problem to light a few years earlier.
Paradoxically, the United States are facing similar challenges. For years, they have benefited from strong growth by pushing the consideration of their problems (environment, infrastructure, health insurance). Even without the financial crisis, addressing the resolution of these issues have slowed us growth.
Is not that the United States and China are in the same situation. One of the major future challenges will be to find a way to align the savings from these two countries, in view of the serious trade imbalances which, in the opinion of some, are at the origin of the financial crisis.
One way or another, the financial crisis should clearly slow down the growth of China's medium-term. But its leaders manage to stabilize the situation in the short term A recovery plan focusing on domestic consumption, health and education would have been more persuasive than measures based on the same strategy of growth than that of thirty years.
