HOW CHINA IS HANDLING THE ECONOMIC SLOWDOWN
Rediff, July 30, 2012
Even as Europe continues to go through its economic suicide and the US is stuck in political paralysis -- which could lead to the abrogation of existing tax cuts and mandatory across-the-board budget reductions at the end of the year that would dampen already anaemic growth, or even trigger recession -- China is proving that it is ready to act and do what it takes to sustain its growth.
Beijing has been quite alarmed by the steep fall in economic activity in the last few months
What was initiated as a managed deceleration of the economy to reduce inflationary pressures and deflate a real-estate bubble on the verge of getting out of control acquired, since the end of winter, a dangerous momentum because of the impact of the European crisis.
By June, China's leadership was confronted with the prospect of gross domestic product growth of between seven and 7.5 per cent for 2012, a level too close to the threshold of seven per cent growth it had determined was the minimum needed to maintain social stability.
And some economists consider that real GDP growth for this year would be even lower if the economy were left to its own course.
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