Finally, the tough year for world economy was coming to an end. It’s may be the first time, i think, for China to perceive so vividly the influence of economic globalization. Luckily, China has handled it very well so far and been the first country to regain its economic momentum. However, after tiding over the recession, Chinese Government was aware of the urgent need to adjust its economic structure to bring it onto a more sustainable track.
It said that China economic rebound after a sharp downturn in the beginning of the year was due to the stimulus plan, include Central Government’s $586-billion stimulus package, and its adoption of a proactive fiscal policy and a moderately loose monetary policy. It might seem to be workable and effective, but the sustainability of such government-dominant policies are being questioned increasingly.
It has become a common sense that satisfying GDP aside, long-term and sustainable development is significant as well. What we see now is that the three engines of the economy – consumption, investment and exports – haven’t played a balanced or rational role. According to Beijing Review, about 90% of the current GDP was generated by the investment sector, which means China was building its economy on the most erratic sector. Meanwhile, the export market, once the major driving force, has lost its luster due to the increasing salary and slumping oversea demand.
As a response, many people advocated to change the growth model into a more qualit and sustainable one. China has even make this goal its “New year resolution” at the annual Central Economic Work Conference held earlier last month. Admittedly, it’s necessary to change unrational growth model, but what more important, in my case, is to encourage domestic comsumption.
We all know that people won’t buy anything if they don’t have enough cash in hand, but few know why Chinese perfer to save their money rather than use it. As far as i concern, the answer is simple: people feel unsafe under the poor social insurence, they have to save money for unexpected accidents.
To turn the weak line strong, we need to rise the social welfare first, for it’s the determined factor of comsumption. Living under the threat of worldwide economy melt-down, citizens will need more indemnity than ever.
So, spend less on economy and more on social insurence, then you may find the right path to sustainable growth.
