The days of double-digit growth in China are long gone now. And as China shifts to a new economic model, the term ‘the New Normal’ is often used to describe this supposedly more sustainable economic growth. The consensus is that the New Normal will usher in a steadier, stronger, more sustainable economy led by consumption and services. But when you break it down to a granular level, what does the term really mean? More importantly, what does the New Normal mean for the level of economic growth being pursued in China? What implications does it have for rebalancing the economy and different industries?
Everyone knows that China’s state-owned enterprises (SOEs) are in dire need of reform. However, it seems the government wants to take its time through the reform process. The State Council’s recently released guideline document on SOE reforms hasn’t set any deadlines or quantifiable targets. Rather it seems to stress upon the importance of not rushing through or forcing any immature reforms. There’s a reason for that. Any attempt to speed up implementation of reforms at Chinese SOEs can have devastating consequences. We explain why.