China and the Global Economy: Creating New Ingredients for Growth, by Christine Lagarde, IMF Managing Director

CPC Central Committee and the State Council continue to support stable growth trend, focus on deepening reforms and opening up, accelerating transformation and upgrade the Chinese economy as well as protect and improve the livelihood of the population.

[Chinese Bureau of Statistics, www.gov.cn; http://www.gov.cn/wszb/zhibo581/content_2509780.htm]

The government statements show confidence that the economy will continue to grow and reforms will be successful. However according to the IMF, “Space for demand support policies through government spending and lending (including through the shadow banking in China) is approaching its limits and can no longer be relied on as engine for growth.”

[Managing Director’s Global Policy Agenda to the International Monetary and Financial Committee; October 12, 2013; Page 5: Emerging market economies]

“Bold structural reforms are needed to contain growing credit risk and maneuver a smooth transition to consumption – driven growth.”

“Interest rates should be liberalized and a more transparent interest – rate based monetary framework developed, supported by strengthened financial sector regulation and supervision, including of the shadow banking system.”

[Managing Director’s Global Policy Agenda to the International Monetary and Financial Committee; October 12, 2013; Page 8: China]

The current central government seems to be somewhat committed to change, but currently also faces massive problems: Air pollution in major Cities for example has become a major problem in 2013. Unrest among ethnic minorities has increased and peaked in the recent attack at the Tiananmen square. Also the urbanisation comes with problems for the environment and living condition of the population. Which may result in increase of social unrest. Further reforms are urgently needed in China.

Growth range to push forward reforms and balance growth

Posted on 13/09/2013 by SBX

By Xinhua

At the opening ceremony of the Annual Meeting of the New Champions 2013, also known as Summer Davos, Li [Chinese Premier Li Keqiang]described the reasonable growth range he first proposed in July as a benchmark for policy adjustments. This range is marked by a lower limit designed to ensure steady growth and job creation and an upper limit meant to avert inflation.

“As long as the economy runs within the reasonable range, we will keep macroeconomic policies generally stable and focus on shifting the growth model and structural readjustment,” Chinese Premier Li Keqiang.

Balanced growth is key to further development of the Chinese economy. Reforms should help opening up the economy and create more chances for private sectors, both domestic and foreign.