In my post “China’s Economic Slowdown Is Precisely What Xi Jinping Wants” on November 17, I quoted my book Tiananmen’s Tremendous Achievements Expanded 2nd Edition to explain that China’s “old tricks of seeking export-driven and credit-fuelled growth do not work.” Xi Jinping has to conduct further economic reform of thorough economic liberalisation to maintain China’s fast economic growth.
However, he knows he will encounter fierce opposition from the powerful conservative faction that wants China to be a military power stronger than the US. Their dream is reflected in senior colonel Liu Mingfu’s bestseller “China Dream: Great Power Thinking and Strategic Posture in the Post American Era.”
The reformists’ dream, however, is to conduct further reform for China’s peaceful rise in order to surpass the US economically.
As described in my book, Xi has succeeded in rallying both the conservatives and reformists around him by his Chinese dream for both economic growth and military development. However, the conservatives’ opposition to economic reform remains fierce. Only when China suffers economic slowdown, and there is a prospect of shortage of funds for military development, will Xi be able to convince the conservatives and make them support his economic reform.
That is why I said, “economic slowdown is precisely what Xi Jinping wants.” China will not regain its miraculous economic growth until Xi has successfully carried out his economic reform.
As the recovery of the world economy depends to some extent on China’s economic growth, the world economy may suffer due to China’s economic slowdown, but that is the price China has to pay for its further fast economic growth.
The following is the full text of Reuters forecast of China’s further economic slowdown in 2015:
China economic growth may slow to 7.1 percent in 2015: central bank report
China’s economic growth could slow to 7.1 percent in 2015 from an expected 7.4 percent this year, held back by a sagging property sector, the central bank said in research report seen by Reuters on Sunday.
Stronger global demand could boost exports, but not by enough to counteract the impact from weakening property investment, according to the report published on the central bank’s website, http://www.pbc.gov.cn.
China’s exports are likely to grow 6.9 percent in 2015, quickening from this year’s 6.1 percent rise, while import growth is seen accelerating to 5.1 percent in 2015 from this year’s 1.9 percent, it said.
The report warned that the Federal Reserve’s expected move to raise interest rates sometime next year could hit emerging-market economies.
Fixed-asset investment growth may slow to 12.8 percent in 2015 from this year’s 15.5 percent, while retail sales growth may quicken to 12.2 percent from 12 percent, it said.
Consumer inflation may hold largely steady in 2015, at 2.2 percent, it said.
China’s economic growth weakened to 7.3 percent in the third quarter, and November’s soft factory and investment figures suggest full-year growth will miss Beijing’s 7.5 percent target and mark the weakest expansion in 24 years.
Economists who advise the government have recommended that China lower its growth target to around 7 percent in 2015.
China’s employment situation is likely to hold up well next year due to faster expansion of the services sector, despite slower economic growth, said the report.
Source: Chan Kai Yee – “Tiananmen’s Tremendous Achievements Expanded 2nd Edition”
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