China’s Economy is the World’s Concern.doc

China?s Economy is the World?s Concern I saw a large investment bank in Europe having a furious inside quarrels for the price of bulk commodities. The stock department, Chinese economy research department and global bulk commodities department had three different opinions for China?s economy. Some are extremely negative opinions for China?s economic outlook, which are based on the downturn of China?s economic growth and consumption. Without a consensus, the three departments had to give their opinions to the clients, letting them make their own choices,”said Ba Shusong, deputy director of the Financial Institute of the State Council?s Development Research Center, in a forum in Shanghai. This revealed foreign research institution?s “contradictory” views about China?s economy and bulk commodities. Foreign media?s negative opinions When foreign research institutions have not reached the consensus about the future of China?s economy, many foreign media expressed pessimistic and negative opinions about China?s economy. Recently, the Wall Street Journal, Bloomberg, and Fuji Sankei Business all published articles, stating that the feast of highspeed economic growth of China will be over and China will have a “hard landing” thanks to the growth of local government debt. Some even considered the high-speed growth of China?s economy from 2008 as a dreamscape. They said that 30%-40% of China?s 8%-10% annual GDP growth rate is created by newly-lent loans. And 20%-25% of these loans will turn out to be bad debts eventually, causing the loss accounting for 6%-10% of the GDP. If the loss were deduced, the GDP growth rate of China would be decreased a lot. When summarizing all the opinions about China?s economy, “soft landing” or “hard landing” is the center of the discussion. Some reviewers said that shrinking export and unsupportive domestic demand in China, which were caused by inflation, RMB appreciation and trade protectionism, have resulted in the supply in exce