Thursday 25 June 2009


BEIJING'S FACADE OF RESILIENCE

John Lee

Asia Times, June 26, 2009

SYDNEY- Some analysts speculate that the turmoil caused by the global financial crisis presents an opportunity for the Chinese government to push ahead with fundamental economic reforms that will raise the importance of domestic consumption as a driver of economic growth.

This point of view ignores political reality. The current crisis makes it more difficult for the Chinese, not less, to pursue reforms given the political need to achieve high growth at all costs. As Premier Wen Jiabao reaffirmed at the post-National People's Congress (NPC) press briefing in March this year, "An 8% GDP [gross domestic product] expansion is the government's pledge and responsibility."

The major response to declining growth was the announcement of a 4 trillion yuan (US$586 billion) stimulus package in November 2008 to be spent over the next two years. As usual, provincial authorities will be the main entities that effectively oversee any stimulus spending. After the announcement was made, within a fortnight, provincial authorities submitted proposals worth approximately 10 trillion yuan.

For example, investment proposals worth 3 trillion yuan from Yunnan province and worth 2.3 trillion yuan from Guangdong province were received. Significantly, these proposals overwhelmingly consisted of big-ticket fixed-investment projects. The amount provincial authorities proposed to allocate to poverty alleviation and social welfare initiatives was small.

(...) [artículo aquí]

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