China Tightens Up as Its Economy Falters
Report

China Tightens Up as Its Economy Falters

Geopolitical Information Service
GIS, 2016
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Editorial Rating

8

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  • Innovative

Recommendation

Despite calmer markets and some positive indicators in its real estate and manufacturing sectors, China so far has failed to address major issues, such as its falling currency, volatile stock market and weaker-than-expected economic growth. Without effective measures, it is doubtful the country will reach its targeted 6.5% growth rate for 2016. This expert analysis by journalist Nick Fielding sizes up the economic as well as the political constraints facing China today. getAbstract recommends his concise article to investors and executives interested in China’s economic progress and its impact on the rest of the world.

Summary

President Xi Jinping so far has failed to restructure China’s embedded and unproductive state-owned monopolies, which are rife with excessive debt and overcapacity. Nonfinancial entities’ debts currently stand at 250% of GDP, compared to 100% in 2009; government has assumed debt of more than $4 trillion, much of it secured by assets of dubious quality. Thus, the renminbi will continue to slide against the dollar, at least through 2016.

Open discussions of new ideas about reform could help solve these problems. But in the current atmosphere of political repression, that’s unlikely to happen...

About the Author

Nick Fielding, an investigative journalist, is a guest expert for Geopolitical Information Service.

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