High-ranking Chinese leaders meet Monday for the Central Economic Work Conference to map out economic plans for 2012. This gathering of China’s movers will involve a hard look at both the international and domestic economic landscape to inform its moves for the new year.
Arguably unable to continue relying on infrastructure investments to spur its economy and seeing a weak manufacturing economy already on the horizon, China starts to look at other ways to spur growth. For instance, some estimates point to 64 million empty homes. (See China’s empty cities by the Unconventional Economist, Dec 15, 2010). A case surely for the leaders to ponder about – sustainable and grounded growth.
Europe’s sovereign debt crisis is also killing China’s biggest customer base.
We have also come to expect China’s double digit growth as a norm but as skeptics had pointed out, could not last forever.
Economic growth was down to 9.1% in the last quarter, the least in two years. Let’s see how the Chinese model reacts.
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Wen May Cut China Taxes to Spur Growth
Victor Ruan, Beijing
Source – Bloomberg, published December 13, 2011
China may use tax cuts to shore up expansion in the second-largest economy next year as export growth weakens and the threat of bad loans from stimulus spending narrows the government’s options.
The nation’s top officials are mapping out policies for 2012 at the annual Central Economic Work Conference in Beijing. The event started yesterday, according to the state-run Xinhua News Agency.
Banks from China International Capital Corp. and Goldman Sachs Group Inc. to Barclays Capital forecast Premier Wen Jiabao will cut taxes after fiscal revenue surged past the government’s target this year. Lower levies would spur consumption without the bad-debt risks triggered by a record 17.5 trillion yuan ($2.8 trillion) of lending in 2009 and 2010 that funded infrastructure projects and real-estate speculation. Read the rest of this entry »
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