Friday, December 21, 2007
Written In China
The People's Daily Online offers the top ten catchphrases used by Chinese media in talking about the Chinese economy, along with brief explanatory passages that I've excerpted. It's a fascinating glimpse of how this white-hot economy perceives itself:
"Sound and fast"
...The emphasis on "sound" demonstrated the central government's determination in accelerating the shift of economic growth mode and realizing a comprehensive, balanced and sustainable development of the national economy...
Huge rises in food prices lifted the nation's consumer price index to an 11-year high of 6.9 percent in November...
The price increases were deemed as "structural and temporary in nature" because the rises were not caused by an imbalance between general social demand and supply. But it was widely believed that China was entering a period when inflation would keep rising...
...Affected by imbalance in the world economy, China has been bothered by mounting trade surplus that resulted in huge foreign exchange reserves and the banking system's credit initiative...
...The yuan has appreciated about 11 percent since China de-pegged it from the U.S. dollar in July 2005.
Some critics said that the yuan was undervalued, something which gave China exporters an unfair price advantage. It was also a main reason for the massive trade imbalance between China and its major trading partners...
...On Thursday, the central bank raised interest rates for the sixth time this year to cool the economy after inflation accelerated at its quickest pace since1996.
Such frequent rate hikes have been rarely seen in history...The monetary policies, in the form of "combination punches" as described by analysts, aimed at strengthening the currency and guiding investment growth...
...A bullish market calls for discipline and rationality. China Securities Regulatory Commission Chairman Shang Fulin has said, generally speaking, China's capital market was still in the primary stage of continuous and solid development.
He pointed out that the key task at present, and for some time to come, was to "accurately grasp the development rule and features of the capital market, strive to develop the capital market and raise the proportion of direct financing".
This statistical term was used in the report delivered at the 17th Party Congress...
The original statement in the report read "conditions will be created to enable more citizens to have property income"...
Energy and emission
...In 2007, a turning point appeared for the first time in the aspect of energy conservation and emission reduction. In the first three quarters, energy consumption per unit of GDP dropped three per cent and the discharges of both sulfur dioxide and chemical oxygen demand dropped for the first time.
It seemed the nation would achieve the goal in the Outline of the 11th Five-Year Plan -- "from 2006 to 2010, we will achieve the goal of reducing the energy consumption per unit of GDP by around 20 per cent and the total emission of major pollutants by 10 per cent"...
...The economic lawmaking has been deepened from the level of the framework legislation. It has paid more attention to the establishment of the system and standardization of rights and responsibilities, as well as protection of rights and benefits.
Made in China
"Made in China" -- a term familiar to people of numerous countries around the world -- suffered from an unprecedented "confidence crisis" this year.
The blasting fuse was the recall of China-made toys by Mattel Inc. It was followed by the fact that Chinese exporters encountered quality problems with their toys, toothpastes and foods.
The reasons for the recalls were not just quality defects because behind them were standard disputes, technical barriers, trade protection and the playing-up of media coverage.
However, China was determined to restore the confidence in "China-made" products with a four-month nationwide special campaign for rectification of product quality and food safety.
The Chinese leadership has officially signaled the shift from economic growth to economic development. So it's not surprising to see the emphasis on legal and regulatory infrastructure, as well as the warnings against the pitfalls of excess cash and inflation.
The world has gotten used to double-digit Chinese growth rates over the past ten years. But that can't go on forever. Still, given that China is a cash-importing country, what would a Chinese economic crisis do to the world economy? Any economists who happen to read this, consider that an invitation to weigh in. I'll bump any insightful Comments into an update to the post.