World Bank: China Faces Crisis

Dr. Michael LaitmanIn the News (from The Wall Street Journal): “An exclusive preview of an economic report on China, prepared by the World Bank and government insiders considered to have the ear of the nation’s leaders, offers a surprising prescription: China could face an economic crisis unless it implements deep reforms, including scaling back its vast state-owned enterprises and making them operate more like commercial firms.

“The report warns that China’s growth is in danger of decelerating rapidly and without much warning… A sharp slowdown could deepen problems in the Chinese banking sector and elsewhere, the report warns, and could prompt a crisis, according to those involved with the project.

“It recommends that state-owned firms be overseen by asset-management firms, say those involved in the report. It also urges China to overhaul local government finances and promote competition and entrepreneurship.

“While some reduction in growth is inevitable—China has been growing at an average of 10% a year for 30 years—the rate of decline matters greatly to the world economy. With Europe and Japan fighting recession and the U.S. experiencing a weak recovery, China has become the most reliable source of growth globally.

“But current forecasts by the Conference Board, a U.S. think tank, see the Chinese economy growing 8% in 2012, and slowing to an average annual growth rate of 6.6% from 2013 to 2016. …China’s annual growth rate will begin to ‘downshift’ by at least two percentage points starting around 2015.”

My Comment: The crisis will hit China in any case. The only solution is to restructure the entire society through integral upbringing of the population, and according to this, rebuild the whole country on the principles of reasonable consumption, equal distribution, and protection of the environment.

Related Material:
China Is No Longer A Locomotive
China’s Shaky Economic Foundation
China: Between Money And Force

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