Preparing for impact of capital
power of an economy depends not on the products it exports but on its exported capital, for the latter better shapes global economic patterns. Therefore, it is more important for China to become a capital net exporter than a country with flourishing trade data, because it would symbolize its growing ability to influence the global industrial structure, which is essential at a time when it faces economic slowdown and transition.
any effect will result in the withdrawal of QE by the US Federal Reserve on China’s real economy because its purchase of $15 billion a month is very small and global liquidity levels remain high. But China must prepare to tackle another development— the flight of high-end manufacturing industries back to the US at an accelerated pace. China’s economic future will be decided not by the Fed, but by its own reform policies.
favorable policies China has implemented for State-owned enterprises will make it difficult to arrest the economic slowdown. China needs to provide equal opportunities for SOEs and private enterprises to help the healthy development of the economy.
consumption has huge potential, waiting to be cashed in on. This is the general belief among economists and decisionmakers. So, compared with the past measures, the State Council’s latest move of stimulating consumption will be more effective.
government’s indicative growth number for 2015 will signal the priority that the authorities put on growth and reforms. The current emphasis on meeting short-term growth targets will make it more challenging to implement the policies necessary to shift growth to a more sustainable medium-term path… China’s key medium-term policy challenge remains implementing reforms that support China’s next transformation toward more efficient, equitable, and sustainable growth.