February 27, 2012

WHEN THE EASY LIFTING ENDS:

World Bank to China: Free up your economy or bust (Annalyn Censky, February 27, 2012, CNNMoney)

The World Bank and a Chinese think tank have a stern warning in store for China's government: Transition to a freer commercial system, or else face an impending economic crisis.

The "China 2030" report, released by the World Bank on Monday, recommends China enact reforms promoting a freer economy. Those reforms include a major overhaul turning China's powerful state-owned companies into commercial enterprises.

Critics point out that China cannot keep up its rapid growth under this system forever. Emerging economies tend to start slowing when their economy reaches about $16,740 per capita, according to research by economists Barry Eichengreen of the University of California at Berkeley, Donghyun Park of the Asian Development Bank and Kwanho Shin of Korea University.

They suspect China will hit that point around 2015. The report forecasts that economic growth in China will gradually slow, from an average of 8.6% in 2011-2015 to an average of 5% in 2026-2030. Without the reforms, the report said China would be on an even slower growth path.
Enhanced by Zemanta

Posted by at February 27, 2012 6:35 AM
  

blog comments powered by Disqus
« THE DRAGON HAS NO TEETH: | Main | THE GREATER EAST ASIAN CO-OPERATION ANGLOSPHERE: »