China’s `new normal’ growth model Is starting to get expensive
Posted by seumasach on September 12, 2015
“Airports, subways, bridges, railways and water projects are among the approved projects by authorities since May, according to Mizuho. Provincial efforts include Shandong’s announcement it will buy small and medium-sized residential properties and convert them into public rental homes.”
The above quote illustrates how different the Chinese system is. They may be propping up the stock market to keep their middle class afloat but the pattern is the extension of credit to develop the real economy following Deng Xiao Ping’s dictum that whatever you do never lose control of the credit system. If only we in the West could do the same thing, renewing our creaking infrastructure and turning empty homes into council houses. Perhaps Jeremy Corbyn has something of the like in mind?
10th September, 2015
When Premier Li Keqiang took the stage Thursday at the World Economic Forum’s “Summer Davos” meeting in Dalian, he told business leaders that although China faces challenges, growth is on track and fundamentals remain sound.
The upbeat message is all part of a ‘New Normal’ narrative from China’s leadership as the economy transitions from relying on heavy industry and debt to one driven by consumption and services. What Li didn’t mention was the spiraling bill associated with keeping the economy on course to hit the Communist Party’s growth target of about 7 percent for this year.