Well the Chinese Communist part government is meeting to rubber stamp the next 5 year plan LINK1 - this is the 13th since 1949. There is plenty for them to discuss but I really wonder why they need these 5 year plans. Such plans will inevitably be out of date as they get implemented and are too inflexible. In China they tend to over-prioritze investment and lead to major problems of corruption as bureaucrats make sure their pet projects are supported. Even with consumption on the rise there are too many shopping malls being built LINK2
The Chinese economy needs major strucural reform so that it become less investment led (47% of GDP) and more driven by consumer consumption (32% of GDP) .This means less government involvement in the actual economy and more focus on providing better health care and social security provision so that people do not save some 40% of their income. The Chinese economy also needs to deal with major problems of non performing loans (NPLS) hidden in its banking system. There are clearly far more NPLS than they admit to. There also needs to be more focus on tackling environmental issues and the health of their citizens it is the quality of economic growth that matters just as much as the quantity.
The Chinese economy needs major strucural reform so that it become less investment led (47% of GDP) and more driven by consumer consumption (32% of GDP) .This means less government involvement in the actual economy and more focus on providing better health care and social security provision so that people do not save some 40% of their income. The Chinese economy also needs to deal with major problems of non performing loans (NPLS) hidden in its banking system. There are clearly far more NPLS than they admit to. There also needs to be more focus on tackling environmental issues and the health of their citizens it is the quality of economic growth that matters just as much as the quantity.
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