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Finance & Economy

China’s economic slowdown continues


Cranes are seen at a construction site in Beijing

Cranes are seen at a construction site in Beijing

In my post “China’s Economic Slowdown Is Precisely What Xi Jinping Wants” on November 17, I quoted my book Tiananmen’s Tremendous Achievements Expanded 2nd Edition to explain that China’s “old tricks of seeking export-driven and credit-fuelled growth do not work.” Xi Jinping has to conduct further economic reform of thorough economic liberalisation to maintain China’s fast economic growth.

However, he knows he will encounter fierce opposition from the powerful conservative faction that wants China to be a military power stronger than the US. Their dream is reflected in senior colonel Liu Mingfu’s bestseller “China Dream: Great Power Thinking and Strategic Posture in the Post American Era.”

The reformists’ dream, however, is to conduct further reform for China’s peaceful rise in order to surpass the US economically.

As described in my book, Xi has succeeded in rallying both the conservatives and reformists around him by his Chinese dream for both economic growth and military development. However, the conservatives’ opposition to economic reform remains fierce. Only when China suffers economic slowdown, and there is a prospect of shortage of funds for military development, will Xi be able to convince the conservatives and make them support his economic reform.

That is why I said, “economic slowdown is precisely what Xi Jinping wants.” China will not regain its miraculous economic growth until Xi has successfully carried out his economic reform.

As the recovery of the world economy depends to some extent on China’s economic growth, the world economy may suffer due to China’s economic slowdown, but that is the price China has to pay for its further fast economic growth.

The following is the full text of Reuters forecast of China’s further economic slowdown in 2015:

China economic growth may slow to 7.1 percent in 2015: central bank report

China’s economic growth could slow to 7.1 percent in 2015 from an expected 7.4 percent this year, held back by a sagging property sector, the central bank said in research report seen by Reuters on Sunday.

Stronger global demand could boost exports, but not by enough to counteract the impact from weakening property investment, according to the report published on the central bank’s website, http://www.pbc.gov.cn.

China’s exports are likely to grow 6.9 percent in 2015, quickening from this year’s 6.1 percent rise, while import growth is seen accelerating to 5.1 percent in 2015 from this year’s 1.9 percent, it said.

The report warned that the Federal Reserve’s expected move to raise interest rates sometime next year could hit emerging-market economies.

Fixed-asset investment growth may slow to 12.8 percent in 2015 from this year’s 15.5 percent, while retail sales growth may quicken to 12.2 percent from 12 percent, it said.

Consumer inflation may hold largely steady in 2015, at 2.2 percent, it said.

China’s economic growth weakened to 7.3 percent in the third quarter, and November’s soft factory and investment figures suggest full-year growth will miss Beijing’s 7.5 percent target and mark the weakest expansion in 24 years.

Economists who advise the government have recommended that China lower its growth target to around 7 percent in 2015.

China’s employment situation is likely to hold up well next year due to faster expansion of the services sector, despite slower economic growth, said the report.

Source: Reuters – “China economic growth may slow to 7.1 percent in 2015: central bank report”

Source: Chan Kai Yee – “Tiananmen’s Tremendous Achievements Expanded 2nd Edition”

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About chankaiyee2

Author of the book "Tiananmen's Tremendous Achievements" about how with the help of Tiananmen Protests, talented scholars with moral integrity seized power in the Party and state and brought prosperity to China. The second edition of the book will be published within a few days to mark the 25th anniversary of Tiananmen Protests All the parts in the first edition remain in the second edition with a few changes due to information available later and better understanding. There are also some changes for improvements of style. The new parts are Chapters 12-19 on events in China after the first edition was published: The fierce power struggle for succession between reformists and conservatives; Xi Jinping winning all elders’ support during his mysterious disappearance for 2 weeks in early September, 2012; and Xi Jinping Cyclone. Chan Kai Yee's new book: SPACE ERA STRATEGY: The Way China Beats The US An eye-opening book that tells the truth how the US is losing to China. The US is losing as it adopts the outdated strategy of Air-Sea Battle while China adopts the space era strategy to pursue integrated space and air capabilities: It is losing due to its diplomacy that has given rise to Russian-Chinese alliance. US outdated strategy has enabled China to catch up and surpass the US in key weapons: Hypersonic weapons (HGV) that Pentagon regards as the weapon that will dominate the world in the future. Aerospaceplane in China’s development of space-air bomber that can engage enemy anywhere in the world within an hour and destroy an entire aircraft carrier battle group within minutes. Anti-satellite (ASAT) weapons, anti-ASAT weapons, stealth aircrafts, drones, AEW&C, etc. The book gives detailed descriptions of China’s weapon development based on information mainly from Chinese sources that the author monitors closely. U.S. Must Not Be Beaten by China! China is not a democracy. Its political system cannot prevent the emergence of a despotic leader or stop such a leader when he begins to bring disasters to people. A few decades ago, Mao Zedong, the worst tyrant in world history did emerge and bring disasters to Chinese people. He wanted to fight a nuclear war to replace capitalism with communism but could not bring nuclear holocaust to world people as China was too weak and poor at that time. If a despot like Mao Zedong emerges when China has surpassed the US in military strength, world people will suffer the misery experienced by Chinese people in Mao era. China surpassing the US in GDP is not something to worry about as China has the heavy burden to satisfy its huge population, but China surpassing the US in military strength will be world people’s greatest concern if China remains an autocracy. US people are of much better quality than Chinese people. What they lack is a wise leader to adopt the correct strategy and diplomacy and the creative ways to use its resources in developing its military capabilities. I hope that with the emergence of a great leader, the US can put an end to its decline and remain number one in the world. China, US, space era strategy, air-sea battle, space-air bomber, arms race, weapon development, chan kai yee

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