China’s economy is facing many problems that are cyclical and also structural. Some economists believe China reached the Lewis Turning Point six years ago, where the growth benefits of rural-to-urban migration dried up and wage costs started to escalate. The growth of the Chinese economy relied very much on its cheap labor—a competitive advantage that has been exhausted. Simply put, “China has come to the end of the period of easy gains in GDP.” It faces two possible paths ahead: the hard road of structural reform and painful consolidation, and the easy road of fiscal and monetary stimulus leading inevitably to further problems along the way.
Fixing the Chinese Economy Means Short-Term Pain for a Sound Future
The heady days of double-digit economic growth rates are now history in China, and even achieving 7-7.5% growth is unthinkable. The stock market has been on a roller coaster ride. The Renminbi has fallen dramatically and the trade numbers are down too. Li Wei, Professor of Economics at CKGSB, feels that to solve this China must implement structural reform. The downside: it will be painful. The upside: the Chinese economy will be better off in the long run.
SOE Reform: Pride and Prejudice Vs. Sense and Sensibility
It is a truth universally acknowledged that a Chinese state-owned enterprise (SOE) in possession of industrial assets must be in want of reform. China’s reforms have released many assets into private ownership, but large blocks remain in corporations linked either to the central government or to a local government via chains of corporate ownership. The State Council’s latest guidelines on the reform of state-linked enterprises envisage more private ownership, some mergers, and a greater role for state asset management companies. But would that ensure better corporate governance?
China’s Pollution Tax: Putting a Price on Pollution
In a bid to improve the environment, the Chinese government is considering imposing a pollution tax. But how exactly should it determine the tax amount?
How China’s Economic Stimulus Can Avoid the Missteps of 2009
Early indications show that the Chinese government’s efforts to prop up the economy might be able to steer clear of the risks of the 2009 economic stimulus
China Film Group and the Art of Playing Favorites in China’s Movie Market
How gatekeeping by the China Film Group is altering the dynamics of Hollywood blockbusters in China.
The Chinese Economy Needs to Break Out of the Overcapacity Trap
China’s economic growth model has created a serious overcapacity problem that will continue to derail future growth unless tackled now.
China Stock Market Update: No Bull in this China Shop
Why the government’s efforts to stabilize China’s flailing stock markets have not worked so far.
Understanding China’s Anti-Monopoly Law
At times controversial, China’s Anti-Monopoly Law is playing an increasingly important role in the country
Rules of the Game: Changes in China’s Foreign Investment Law
A proposed change to China’s foreign investment law could have big implications for foreign investors
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