Back in the middle of the decade, Chinese policymakers were struggling to contain inflation. They managed not only to do so, but they saved up quite a pile of cash as well. All of that took a lot of hard work and due diligence. They reap what they sow.
That having been said, inflation is still a reality for them. Right now their growth rate is around 6%, but their inflation is probably around 4%. That means they're only getting 2% growth, which is paltry. How much will inflation go up with the government stimulus being applied?
Still, it is better than how we're doing, but the point is that the truth is --as usual-- a little more complicated than the news would suggest. It also seems doubtful that they can have meaningful growth when so much of their economy is dependent on exports, unless the current bout of reforms manages to build up the middle class so that they have self-sustaining growth. This is at least as difficult as the feat they just accomplished in reining in inflation.
The parent poster has a much better grasp on the big picture than the author of the Salon article.
While he was bashing western banks, he failed to point out that domestic Chinese banks have long been giving out loans to unprofitable companies as a way of creating employment, and that the central government regularly bails them out.
China's economy is a really interesting and complicated subject, especially given the unreliability of local economic data.
But Salon is just giving us useless linkbait by publishing an article with a few cut and pasted quotes and a catchy headline.
Oh we're all well aware that transparency is a joke in the Chinese financial system. Let's frame it this way. Remember Jefferson's argument that banks are scarier than armies? Imagine if China actually HAD a working, efficient banking system.
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[ 2.9 ms ] story [ 19.7 ms ] threadThat having been said, inflation is still a reality for them. Right now their growth rate is around 6%, but their inflation is probably around 4%. That means they're only getting 2% growth, which is paltry. How much will inflation go up with the government stimulus being applied?
Still, it is better than how we're doing, but the point is that the truth is --as usual-- a little more complicated than the news would suggest. It also seems doubtful that they can have meaningful growth when so much of their economy is dependent on exports, unless the current bout of reforms manages to build up the middle class so that they have self-sustaining growth. This is at least as difficult as the feat they just accomplished in reining in inflation.
While he was bashing western banks, he failed to point out that domestic Chinese banks have long been giving out loans to unprofitable companies as a way of creating employment, and that the central government regularly bails them out.
China's economy is a really interesting and complicated subject, especially given the unreliability of local economic data.
But Salon is just giving us useless linkbait by publishing an article with a few cut and pasted quotes and a catchy headline.