Zhou warned then-Premier Wen Jiabao that the stimulus was going on too long but his advice was ignored, according to Chinese officials with knowledge of the matter. The result was that the PBOC was late in trying to contain the resulting inflation, and China's debt problems also worsened.
Zhou as part of a wider personnel shuffle that also comes after internal battles over economic overhauls, The Wall Street Journal reported Wednesday. A final decision has yet to be reached, party officials told the Journal. To Read the Full Story.
Subscribe Sign In. Continue reading your article with a WSJ membership. Resume Subscription We are delighted that you'd like to resume your subscription. Please click confirm to resume now. Sponsored Offers. Taking Off The economy hits a sweet spot, with trade supercharging growth.
Exports of goods soar…. Massive government spending and bank lending keep the economy humming through the global financial crisis. State industry soars. Cities boom, luring more migrants. Chinese students who went abroad return. But the stimulus and easy credit contribute to corruption, pollution, irrational investment and debt, creating a drag on the economy.
Fast Track A high-speed rail network takes shape rapidly, fueled by heavy government spending and debt. Note: Growth is shown as an average between construction start month and a station's launch day.
Loose Change The torrent of easy money produces a surge in infrastructure development, factory output and household consumption, until the excesses begin to show.
Easy money juices construction and consumption…. The government tries to engineer a bull market in the stock exchanges to kickstart growth, but it backfires. Protests tick up. A summer of discontent in China underlines the challenges of a slowing economy. On property, there have been inklings recently of a more permissive stance—some large banks have been ordered to accelerate mortgage approvals, according to Bloomberg. But credit growth was still tepid in September, and the sharp downtrends in property investment, sales and starts remain intact.
The news on consumers and trade looks better. Chinese exports remain robust, and retail sales bounced back in September to 4. The real risk for may therefore be that Beijing concludes that its strategy of doubling down on exports and high-tech industry, while mercilessly squeezing property and high-value service sectors like internet technology, is working well enough—and then finds itself overtaken by events.
One possible threat is an export reversal. Chinese exporters, despite rising costs, remain very competitive. But they have also benefited from the Delta wave that closed many other Asian factories and prolonged the shift in wealthy economies away from spending on services and toward goods.
In , net employment gains in Chinese industry outpaced those in services for the first time since , a pattern that may very well have been repeated this year.
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