In its annual report on the Chinese economy, the International Monetary Fund on Wednesday warned that “time is running out” for China to shift away from its credit and investment fuelled growth model, pointing out that the government, banks and businesses are increasingly strained from years of rapid but unbalanced growth.
China on Wednesday vowed to step up its fight against bribery and corruption by multinational corporations, days after the police unveiled a litany of bribery and misconduct allegations against British drugmaker GlaxoSmithKline – a move that industry expects say could presage a broader crackdown in China’s lucrative healthcare industry.
The slew of economic data released last week has confirmed the worst fears of many global investors: China is serious about rebalancing its economy and growth rates of 6 – 7 percent will no longer be encouraged. Attempts to keep growth above that level will simply mean that it will take much longer for China to fix the underlying problems in its economy, that the costs will be much greater, and that the risk of a disorderly crisis will increase.
Chinese finance minister Lou Jiwei said growth in the world’s second largest economy may dip below 7 percent in the second half of the year, signalling that Beijing may tolerate a slower pace of expansion than officials have previously indicated.
Lou, speaking yesterday at the U.S.-China Strategic and Economic Dialogue in Washington, added that he is confident of achieving a growth rate of at least 7 percent this year, though 6.5 percent growth would not pose a “big problem”.
For three decades, China’s reform and opening-up policies led to unprecedented economic growth, as well as the creation of first-tier megacities particularly along the coastal regions. China has in recent years contemplated a grand plan to make urban residents of 350 million Chinese villagers. It’s a tall order and at stake is nothing short of China’s future.
When I recently visited Chongqing, the megalopolis of the southwest which already has more than 30 million inhabitants, the sprawling urban mammoth was filled with massive construction projects.
China’s decades-old policy of providing free coal for winter heating to residents in the north is shortening the lives of people by about 5.5 years and causing higher rates of lung cancer, heart attacks and strokes, according to a new study published on Tuesday.
The study, which appeared in The Proceedings of the National Academy of Sciences, was conducted by researchers from China, Israel and America and was based on analyses of health and pollution data collected by official Chinese sources from 1981 to 2001.
China’s key financial centre Shanghai has received State Council approval to establish a trial free-trade zone within its surrounding area, serving as a test for some of the government’s financial overhauls, including interest rate liberalisation and full convertibility of the renminbi, reported the China Daily on Thursday.
China markets stabilised on Monday as policymakers offered reassurance that there is ample liquidity in the financial system, bringing to a close June’s record credit squeeze which raised fears that China’s years of relying on debt to finance massive projects are coming to an end.
China markets continued its rebound on Monday in a sign of growing confidence that credit conditions were improving as cash rates extended their decline from peaks reached during June’s credit crunch.
China’s central bank chief on Friday said it stands ready to preemptively “adjust” liquidity in the market to ensure stability, a policy that would prioritise the need for reform in China’s economy while keeping the lid on speculative lending in the country’s booming shadow banking sector.
China, the world’s bigger emitter of carbon dioxide, has launched its first carbon trading platform in the southern city Shenzhen, with plans to open similar schemes in seven other regions by 2014.
