China’s Slowdown Comes to an End

Asheley , The Financialist, 09/06/13

In 2007, when Chinese Premier Li Keqiang was a regional Communist Party official, he said that the statistics used to calculate China’s GDP data were “man-made” numbers that should be used “for reference only.” At least, that’s what a diplomatic cable released by the website WikiLeaks reported Li said during a dinner with the United States’ then-ambassador to China. But the cable also said something else: that Li had an alternate set of economic indicators that he used to gauge how the Chinese economy was really doing. Those measures were industrial electricity consumption, railway cargo volumes and bank lending.

But as it turns out, Li’s preferred economic yardsticks actually do a pretty good job of picking up coming shifts in the official measure of the Chinese economy’s growth. Doubts about the utility of the official GDP measure aside, the numbers that come out of China’s statistics bureau still move markets and inform economists’ thinking about what is happening in the world’s second-largest economy. In other words, the official data still matter, and an early read on where they’re going can be a critical insight. When Credit Suisse analysts tracked the quarterly change in the premier’s three favored economic measures in a forward-looking indicator they called the Li Keqiang Momentum Index (LKMI), they found that the index correlated better with China’s GDP growth than two of China’s most closely watched forward-looking indicators – the purchasing managers’ index survey results generated separately by HSBC and China’s National Bureau of Statistics.

It’s an especially good sign, then, that the LKMI shows that the slowdown in Chinese growth that has been making investors the world over nervous for the past year seems to have come to an end in the second quarter. “We believe the Chinese economy has bottomed,” Credit Suisse Chief Economist for Non-Japan Asia Dong Tao wrote in a recent report. “The upward momentum may not be strong, but stabilization itself would be good news, given how bearish market participants appear to be about China’s outlook.”

Tao said that all three of the LKMI’s indicators have started to gather steam in the third quarter, which reflects the positive news the economist and his team of analysts have been hearing anecdotally: Corporations report that sales are improving – though Tao said there appears to be no specific catalyst – and order flows remained high even in July and August, which are usually slow months. Tao also said that banks are speeding up the pace at which they approve loans for a growing number of infrastructure projects, prompted by the Chinese government’s announcement in July that it would pump more money into urban infrastructure and railways in order to facilitate economic output.

But as the improvements are relatively new, it is worth asking whether they are here to stay or just a blip in the data. The answer, Credit Suisse’s economists said, is the former. But that doesn’t come without a caveat: “Bleeding has stopped,” they noted. “But surgery is still needed.”

First, the bleeding. The government’s crackdown on the country’s frothy housing market should soon ease – or at least not expand – potentially providing a boost to the rest of the economy, Tao explained. In an effort earlier this year to address what Credit Suisse analysts have previously described as a property bubble, Chinese officials raised the required down payment on new homes and slapped a 20 percent capital gains tax on home sales. In May, the government delayed approvals for pre-sale permits, which are permission slips to sell homes that are still under construction. But Tao said that the government’s stance may be softening, and that brisk land sales mean that construction could soon pick up as well. “Beijing no longer considers the housing sector as a source of risk, but a pillar to growth,” Tao wrote. While it’s still possible that the government could experiment with a property tax, he said, limitations on people buying apartments in cities in which they do not live will probably fall by the wayside.

Local governments are also getting back into the spending groove. When China unleashed a $586 billion fiscal stimulus package during the global financial crisis in 2009, local governments were responsible for providing $180 billion worth of the infrastructure spending. But concerns soon started to emerge about the size and sustainability of local government debts, and then local infrastructure activity paused while the Chinese political leadership was going through a once-a-decade changeup that began in November and ended in March. Recently, the Chinese government prodded local governments to get the investment machine running again, and Tao pointed to a number of new bank-supported projects, especially to build new subways and railways, as evidence that the prodding was having the intended effect.

Finally, in a theme Credit Suisse analysts have visited before, the fact that economic conditions are improving in the U.S., Europe and Japan – all important customers for Chinese goods – will be a positive for Chinese exports. Tao did caution, however, that the capital flight wreaking havoc in the emerging markets to which China also sends plenty of goods will likewise be a negative. “None of the new supports to growth are robust,” Tao wrote. But they should at the very least keep things in China from getting much worse.

Now, the surgery. To set China on a path to sustainable long-term growth, the government must push through structural reforms that encourage private investment, Tao said. It could start by opening up China’s service sector and cutting corporate taxes. More ambitious initiatives would include breaking up the banking monopoly and scrapping the hukou system, a household registration system that makes it difficult for the waves of migrants who flock to China’s cities from the countryside to access healthcare and education. Such fundamental reforms are absolutely critical to China’s future growth because the current economic drivers – sky-high real estate inflation and local governments drowning themselves in debt to build more than they need – are tottering along on a high-wire that looks increasingly shaky. “Until structural reforms re-engage private investment, the growth is ‘buying time’ because [both] the current housing rally…and local government investments are unsustainable,” Tao wrote.

The Communist Party holds a plenary session in October that could result in the announcement of some broad reform goals, but probably not concrete policy actions, he said. For that, China and investors will have to wait. “We believe that the Xi-Li regime (General Secretary Xi Jinping and Premier Li Keqiang) is committed to reform, but detailed structural reforms may not arrive as soon as October,” Tao wrote. Hard work lies ahead for Chinese officials to create the conditions necessary for stable, long-term growth, but at least China’s recent decline seems to have run its course.

(請至原網址觀看統計圖。)

Are Chinese Reforms Really a Myth?

Ryan Rommann, 10/04/13

Shanghai’s new free trade zone is reform. It is a testing ground for RMB convertibility, market interest rates, foreign investment and perhaps internet openness. Granted it only encompasses 28 square kilometers and may boost economic expansion by 0.1 percentage points, it is still the country’s “new trial for opening,” in the words of Premier Li Keqiang.

Yet pundits still bemoan China as a “broken machine,” ineffective at meaningful change within a system of vested interests and bureaucratic cadres. Liberalization moves with excessive caution only when confronted with social unrest and economic stagnation. China, according to most, is behind the curve.

But slow compared to what?

Certainly Chinese economic reforms are more gradual than the disastrous “shock therapy” of the 1980s’ Washington Consensus. Political reforms are much slower than the Arab Spring. They are slower than Glasnost or Perestroika, and they are a crawl compared to the Cultural Revolution. This is a good thing. Another Great Leap Forward would be devastating to China and the world.

We must view reform through a broader lens that considers time and context. In fact, few countries have reformed at breakneck speed. The Chinese reform process is as prudent as that of its Asian neighbors and on a par with similar developing countries. Even in relation to the United States, China suffers from similar oligarchy and corporate interests. Pace is best measured in relative terms.

Asian Neighbors

China’s gradualism is not unique in Asia. Politically, soft authoritarianism has led most Asian countries.

South Korea alternated between autocracy, marshal law and democracy for 39 years. Park Chung Hee used torture and tanks to crush student protests with a vigor similar to that seen at Tiananmen Square. Singapore remains under the control of Lee Kuan Yew’s People’s Action Party, and 48 years after independence there remains little room for protests, unions or political opposition. Taiwan’s 228 Incident killed up to 30,000 in 1947 and was followed by the “White Terror” period. More than 140,000 political dissidents were imprisoned for being anti-Kuomintang during the 47 year reign of Chiang Kai-shek’s Chinese Nationalists.

Politically, eight out of the 14 countries bordering China are considered “not free” by Freedom House’s 2013 rankings. Only two are completely free (India and Mongolia). China is in a league of undemocratic nations.

Economically, state capitalism (官僚資本主義) continues to be common in Asia. Forty percent of the world’s sovereign wealth funds reside in Asia. Russia’s Gazprom, India’s PSU banks and Thailand’s Electricity Authority need autonomy as much as China’s maligned state-owned enterprises (SOEs). Even China’s export-led growth model is not Chinese at all. Rather, it follows in the footsteps of Japan and the Asian Tigers. Those countries took decades to appreciate currencies, liberalize finance and remove government support – some of which led to the 1997 Asian financial crisis. Let’s hope China can be more cautious.

Developing Nations

China’s nominal GDP per capita is US$6,076 – below Iraq, Iran, Venezuela and Russia. 30% of Chinese live on less than $2 a day – higher than Egypt and Syria. China is a poor country and should be analyzed as such. By mapping China’s HDI (a UN standard for development) with the Heritage Foundation’s Index of Economic Freedom, we see that China is not substantially less free than countries of similar human development. It needs further reform, but the CCP knows this.

The United States

The U.S. has historically favored free markets. Despite some mercantilist policies under Hamilton, the U.S. trumpeted Adam Smith from the beginning. Turmoil in the 1930s led to creation of a social safety net, but funded by capitalism. Reaganomics moved the pendulum back to the right in the 1980s and 90s, but we are seeing it return after the 2008 financial crisis. The U.S. resorted to bailouts, takeovers, quantitative easing and tighter regulation. If Deng Xiaoping called his reforms “socialism with Chinese characteristics,” some might call the recent changes in the U.S. “socialism with American characteristics.” 

It’s also easy to overlook America’s languid progress towards true democracy. It took 94 years to give African Americans the right to vote. Women, or half the voting population, were forbidden to vote for 144 years. Even after universal suffrage, poll taxes and gerrymandering limited political access.

Today, “powerful corporate interest groups dominate the policy agenda” according to Jeffery Sachs. Banks, healthcare, military and oil industries lobby Washington for preferential policies. This is modest compared to the role SOEs play in China, but a far cry from a free market. While pundits are busy pointing towards the myth of Chinese reform, Washington is experiencing a shutdown over healthcare. Given the state of U.S. affairs, it’s a little rich to point at China and say, “Your system is broken.” 

It’s only been 35 years since Deng Xiaoping started opening China. In that time, China has changed immensely, such that the China of 2013 would be completely unrecognizable to Mao. The CCP is run by “capitalist roaders” – communist in name only. Investment by “imperialists and U.S. aggressors” is welcome. Elections are held at municipal levels and a hundred flowers of thought bloom. More reform will come with time. In the meantime, some perspective is needed.       

Ryan Rommann is an economic researcher at Healy Consultants – Singapore. He studied at Beijing’s Tsinghua University and the Maxwell School of Citizenship and Public Affairs.

http://thediplomat.com/china-power/are-chinese-reforms-really-a-myth/

* 本文亦見於《走向民主之路的七個要點》一欄(【政治和社會】區)。該欄就「民主政治」做一般性討論。對此主題有興趣者，請移駕該欄；並請發表高見。 -- 卜凱

Why China Will Disappoint the Pessimists Yet Again  

Jim O’Neill, 09/26/13

China’s eagerly anticipated “hard landing” hasn’t happened yet, and recent indicators make me wonder (not for the first time) if it ever will. In the past two months, the Chinese economy has actually shown signs of accelerating.

Constant pessimism in financial markets about the country’s prospects is only partly guided by economic analysis. There’s also the faith-based view that growth as rapid as China’s simply can’t go on -- and that a non-democratic country really shouldn’t expect to prosper. Many skeptics have been highlighting China’s impending collapse for almost as long as I have been following the country. Maybe the skeptics should be viewed a little more skeptically.

By the end of this year, China’s gross domestic product will be roughly $9 trillion, making its economy comfortably more than half the size of the U.S., and half as big again as Japan. I recall once projecting that China might be as big as Japan by 2015. The country’s far ahead of that optimistic schedule.

China’s economy is already more than three times the size of France or the U.K., and half as big again as Brazil, Russia and India combined. Of the four BRIC countries, China is the only one to have exceeded my expectations. The other three have done less well than I’d hoped.

As I mentioned in a previous column, China is in effect creating another India every two years -- making a mockery of those who’ve argued that India’s democratic model is more likely to deliver long-term economic success. China is already more than four times bigger than its southern neighbor. India’s economy won’t rival China’s for a very long time, if ever.

One Trillion

With GDP growth of 7.5 percent, inflation running about 3 percent, and a currency that’s rising gently against the dollar, China is adding about $1 trillion a year to global GDP, easily boosting its share of the total.

For many analysts, none of this is enough. According to a popular refrain, China might have staved off disaster in 2013 and papered over the cracks yet again in the short term -- but next year (or maybe the year after), the crunch will come. Supporting this notion is a question I’m asked all the time:

If China’s doing so well, how come everyone always loses money investing there? Let me explore both issues a bit further.

It isn’t clear to me why China’s economy must deteriorate next year. China’s slowdown to its current 7.5 percent growth rate was well signposted by a sharp slowdown in leading indicators. Those measures, including monetary growth and electricity usage, are no longer flashing red. Coincident indicators such as the monthly purchasing managers’ index have picked up. Unless you believe that China is somehow doomed to fail, these signs are encouraging. They suggest that the rest of this year and the first part of 2014 might see slightly stronger growth.

The more resourceful pessimists next argue that the better growth signals are coming from parts of the economy where growth is unsustainable -- such as the urban housing market and government-directed investment -- from excessive growth of credit extended by shadow banks, and not from a broadly based expansion of consumer spending. If this were clearly the case, I’d be a pessimist, too, because a buoyant China needs consumers to take the lead.

Data for monthly retail sales suggest that consumption has held up well despite the fall in the trend of industrial production. I closely follow the trend of retail sales, adjusted for inflation and relative to the trend of industrial production, and though not moving in a straight line, this indicator has been generally rising for three years. This is a pretty good sign that the rebalancing China needs is happening. Another is the decline in the current-account surplus to about 3 percent of GDP.

Adjustment Achieved

Reducing the external surplus from more than 10 percent of GDP before 2008 to about 3 percent now -- while limiting the fall in growth from 10 percent to about 7.5 percent -- is quite an achievement. In my view, the “unsustainable” component of China’s economic prospects was the current-account surplus, not the growth rate, and the needed adjustment in the surplus has been achieved.

What about investors losing money in China? How can that be, if the economy is doing pretty well? It depends on how you measure investors’ returns. True, passive investors in the Shanghai index have suffered since 2007, despite a big rally from late 2008 through late 2009. But how many investors invest that way? More important, the Shanghai index is dominated by past winners in the China growth story. If China is rebalancing -- moving away from exports, improving the quality and sustainability of its growth, depending less on government-backed companies -- then the winning investments will be quite different than before.

It’s revealing that the Shenzhen index is performing much better than the Shanghai index, thanks to its greater exposure to newer, smaller, private companies. There’s a more general point here:

When a country is embarking on a significant compositional change to its economy, stock-pickers rather than index-trackers have the upper hand.

The same logic applies to foreign companies trying to benefit not just from China’s ongoing growth but also from its new drivers of growth. No doubt this is a little simplistic, but Apple Inc. (AAPL) or Procter & Gamble Co. (PG), say, are likely to benefit more in this economic environment than Caterpillar Inc. (CAT)

If you ask me, China’s economy hasn’t finished impressing the world with its strength. The changing foundations of that strength may make the prospects harder to read -- but the fact that the underpinnings of Chinese growth are indeed changing is all to the good.

(Jim O’Neill, former chairman of Goldman Sachs Asset Management, is a Bloomberg View columnist.)

To contact the writer of this article: Jim O’Neill at joneill62@bloomberg.net.

To contact the editor responsible for this article: Clive Crook at ccrook5@bloomberg.net.

http://www.bloomberg.com/news/2013-09-25/why-china-will-disappoint-the-pessimists-yet-again.html

讀了韓毓海教授這篇大作，我有一些不同的意見。就教於各位。

1.     現實有兩種

韓教授說：

「中國的根本問題是農民問題，中國歷代改革的核心無非是圍繞著土地制度做文章。而認識這一點，乃是討論中國問題的基礎。離開了這一點，也就從根本上離開了中國現實。」

我同意「農民問題」是中國的「根本問題」之一；但「中國的根本問題是農民問題，…。」則不免偏頗。我手頭沒有數據，也不想花時間搜尋。但我估計，民國以前，農民人數佔中國總人口的80 -90%；中國是個封閉社會，99%以上的糧食靠自給自足；這是韓教授所說：「… 中國歷代改革的核心無非是圍繞著土地制度做文章。」的兩個「根本」原因。

但是，以上兩個(粗估)數據已經不再反映當前中國的「現實」。前者有53.4% (2009), 64% (2010), 70% (2010)等數字(以上見http://zhidao.baidu.com/search?word=%D6%D0%B9%FA%C5%A9%C3%F1%B1%C8%C0%FD&lm=0&srs=0&srsod=3&ie=gbk)；以及47.43% (2013農村人口比例，見http://finance.chinanews.com/cj/2013/01-18/4501152.shtml)。後者則為95%以上(2012) (見http://big5.xinhuanet.com/gate/big5/news.xinhuanet.com/politics/2012-12/26/d_124147371.htm)。

在我看來，姑且不論韓教授的觀點是否合於「中國現實」，但它不免離開了「時代現實」。

2.     「流浪漢說」

韓教授說：

「其實，這些人並不知道：英國之圈地，所圈的主要是長期荒廢的『公地』，而非自耕農的土地，同時，被從土地上『轉移』、趕出來的，也並不是擁有土地的自耕農，而是本來沒有土地的農奴（由於種植業向牧場的轉換，所以就用不著那麼多農奴集體勞動了），在當時的英國，只要農奴肯交贖金，他們就可以『自由』了。這就是為什麼：英國最初的產業工人，大多是從流浪漢轉化而來，而流浪漢，又主要是從『被自由』了的農奴轉化而來，…」

我對英國「圈地」時期的歷史不熟悉，所以我對上述「圈地」部份並無評論。但這段文字在邏輯上似乎「說不通」。如果是「被趕出來」，則無「交贖金」可言。既然要「交贖金」，則無「『被』自由」可言。其次，就常理而言，農奴通常都有家庭，如果他們沒有長期規劃，就拿出一筆「贖金」來「被自由」，「自由」有那麼可貴嗎？

此外，我高度懷疑「英國最初的產業工人，大多是從流浪漢轉化而來，而流浪漢，又主要是從『被自由』了的農奴轉化而來，…」這個判斷或描述的如實性。理由很簡單，即使在工業革命初期，所需的產業工人也不在少數。如果在需要產業工人之前，就有這麼多的「流浪漢」混跡街頭，則當時英國的社會情況應該非常不穩定。

3.     「管理能力說」

我在另一篇文章中也強調過中國人的精打細算和刻苦耐勞不下於任何其他社會的成員。這一點我與韓教授的觀點並無二致。但如果韓教授試圖把「精打細算」和「刻苦耐勞」跟「成本會計」和「企業管理」混為一談，在我看來，則韓教授對「資本主義」商業社會和傳統農業社會兩者的運作狀況，可能需要惡補一下。

4.     「土地規模化經營說」

韓教授說：

「對於近代中國的各種教條主義者而言，中國要發展，要麼靠資本，要麼靠『觀念』，他們共同的所作所為，竟然首先就是要消滅農民，而他們的根本立場，自然也都免不了要與中國社會的根本基礎 -- 農民為敵。」

我想，除了「… 免不了要與中國社會的根本基礎 -- 農民為敵。」是個「稻草人」式的「論辯」手法外，前半段話(到「…靠『觀念』，」)與後半段話(從「他們共同的所作所為，…」到「… -- 農民為敵。」)之間，顯然是個「從『前提』無法導致『結論』」的謬誤。

在這段論述之後，韓教授緊接著說：

「中國農村的凋敝和農民的貧困，絕不是由於中國農民不勤勞，或荒於生計打算之『愚昧』所致，而是由於土地和農村勞動力的低水準迴圈經營。要打破這個困境，就必須把分散的小農組織起來，實行土地規模化經營，如此農村和農業才能真正上台階。」

首先，「規模化經營」是個百分百「資本主義『觀念』」。而要落實「規模化經營」，我看還非得「靠資本」不可。韓教授的思路看來的確是有些不怎麼清楚。

其次，我小時候曾聽家父引用一位農業專家的觀點：

中國農村因為地形和地勢的原因 -- 如四川和台灣都盛行用「梯田」方式耕耘 – 要「實行土地規模化經營」其實窒礙難行。(我現在年紀也大了，一時想不起他的大名。)

如果這位農業專家的觀察有其實際性，則韓教授對中國農村「現實」的認知也不甚了了。當然，在市場機制(= 資本主義)橫行的今天，產銷方面「規模化經營」的確是個高度有效益的方式。

此外，家父也提到，中國沒有歐、美那樣的大地主和從大地主轉變而來的大資本家，根本原因是西方社會實行「長子繼承制」；而中國社會實行「分家制」。

5.     「什麼是中國的『根本問題』？」 -- 代結論

中國過去的「農民問題」或「土地問題」主要有兩個來源：一是天災，一是人禍。「天災」者，「靠天吃飯」這句成語之所本也。「人禍」者，一般用「橫征暴歛」、「苛捐雜稅」這類成語來帶過；也就是「苛政猛於虎」。說白了，不論過去或當下，

「中國的最『根本問題』」是：缺乏「開放的政治制度」以及缺乏「獨立的司法制度」。

其他的論述，不過是在替統治集團或宰制階層轉移焦點而已。

中國的根本問題是農民問題

韓毓海, 09/05/13

【前言】

「國家能力」的探討，是本書的重點特色。作者認為，中國與西方，屬於兩種不同的發展典範。當他們在歷史的長河中發生碰撞，必然引起巨大的動盪。其勝敗固然攸關一時的存亡，但風波稍定後，雙方更需藉此一歷史因緣，相互調整學習，攜手合作，努力開創新典範，讓人類歷史除了軍事結合金融的推動力量之外，仍有其他道路可走。

本書一系列的創新觀點︰諸如「官無封建，而吏有封建」、戰爭國債與資本主義體制、琉球及恰克圖貿易對於中國發展的長遠意義等，引起海內外學術界及廣大讀者熱烈回響，讓本書榮登二○一○年度中國大陸優秀圖書排行榜總榜第一名，全中國熱銷近二十萬冊。

中國的根本問題是農民問題

中國的根本問題是農民問題，中國歷代改革的核心無非是圍繞著土地制度做文章。而認識這一點，乃是討論中國問題的基礎。離開了這一點，也就從根本上離開了中國現實。

近代以來，最常見、最流行的觀念之一，就是把中國之落後，歸結為全是由於農民所造成。農民「素質」差、「素質」低，狹隘、自私的農民，據說還是「東方專制主義」的溫床，這就是所謂「中國的原罪」。或曰中國之「原罪」，就是因為中國有著世界上最多的農民；於是，要發展、要超越、要民主、要自由 -- 首先就要處心積慮地消滅農民。甚至今天更有「土地私有化」方略之呼籲，認為現代化就等於把農民變成一無所有的勞動力後備大軍 -- 據說作為英國工業革命前奏的「圈地」運動，不就是這樣做的嗎？

其實，這些人並不知道：英國之圈地，所圈的主要是長期荒廢的「公地」，而非自耕農的土地，同時，被從土地上「轉移」、趕出來的，也並不是擁有土地的自耕農，而是本來沒有土地的農奴（由於種植業向牧場的轉換，所以就用不著那麼多農奴集體勞動了），在當時的英國，只要農奴肯交贖金，他們就可以「自由」了。這就是為什麼：英國最初的產業工人，大多是從流浪漢轉化而來，而流浪漢，又主要是從「被自由」了的農奴轉化而來，而這就決定了：如此產業勞動大軍，卻從來談不上什麼經營管理經驗（因為是農奴），更一向缺乏協作精神（因為是流浪漢），他們一旦被圈到工廠裡，日夜重複一件機械性的勞動動作，其「精神異化」更是不可避免，所謂「機器對人和勞動力的排斥」，儘管出於只講效率不講人道的血腥資本邏輯，但是，從資本家的角度看來，這確實是基於歐洲勞動力之特點（缺點），所做出的幾乎必然的選擇。 -- 簡而言之，採用這樣缺乏勞動技巧、協作精神、經營能力的「異化」勞動力，還不如多採用機器為好。當馬克思不幸地談到歐洲「流氓無產階級」時，他其實是非常清晰地觸及了歐洲產業勞動者階級的這種「異化」史前史。

與英國和歐洲完全不同，中國社會的最廣大基礎卻是擁有小塊土地的小農，而任何政權如果妄圖要剝奪中國農民的土地所有權，那就等於挖掉了自己執政合法性的根本基礎，這一點，早已經為歷史所反復證明。正是由於中國的基本現實乃是「人多地少」，反而迫使著農民不得不在如此小塊土地上，費盡心力、殫精竭慮，從而在漫長的歷史中，不斷積累了極其豐富的管理、經營經驗；且在家庭勞動之中，中國農民更形成了密切的協作勞動技巧，而中國的農村家庭（農戶），就正是這樣一個分工協作的勞動共同體。於是，在這個意義上，中國的農民，反就被如此的歷史條件，造就為世上最為精明強幹的勞動者，他們甚至是擁有著令人驚歎的管理能力的經營者和精打細算本領的會計。又恰恰正是這一點，使得他們與歐洲的農奴 -- 流浪漢 -- 產業勞動者階級有著不同的發生史、發展史。而探討中國與歐洲之區別，首先就不能不面對這種社會生產勞動的「史前史」所造成的勞動力能力的差別。

對於近代中國的各種教條主義者而言，中國要發展，要麼靠資本，要麼靠「觀念」，他們共同的所作所為，竟然首先就是要消滅農民，而他們的根本立場，自然也都免不了要與中國社會的根本基礎 -- 農民為敵。比如曾以極左面目出現的「托派」，就是認為農民連「革命」也不配，因此，他們絕不會贊成毛澤東的名言：誰能贏得農民的支持，誰就會贏得中國，而誰能解決土地問題，誰就可以贏得農民。實際上，只有毛澤東和共產黨人才真正認識到：中國農村的凋敝和農民的貧困，絕不是由於中國農民不勤勞，或荒於生計打算之「愚昧」所致，而是由於土地和農村勞動力的低水準迴圈經營。要打破這個困境，就必須把分散的小農組織起來，實行土地規模化經營，如此農村和農業才能真正上台階。而只有農業搞好了、只有農村搞好了、只有以農業的發展為基礎，國家方才能將農業剩餘用於城市工商業的發展，再反過來吸收全民就業，只有農村搞好了，我們才能以廣闊的農村市場，來推動城市生產持續的發展。

日本學者杉原薰，正是從社會勞動史的比較分析，深刻地指出：中國能有今天的發展，東亞經濟能實現復興，首先就在勞動力的優勢、強勢，這種勞動力優勢，又絕不是簡單地指人口數量多，而是指作為中國社會基礎的最為廣大的農民，特別是指他們在經營管理方面的經驗、協作勞動的技巧和精明強幹的計算能力，即高素質勞動力才能為經濟的發展奠定根本的基礎，據此，他方才提出了東亞「勤勞革命」模式對抗歐美「工業革命」模式的著名論斷。

什麼是中國模式？杉原薰的研究提醒我們注意一個事實：中國是現代世界上，唯一一個沒有透過剝奪農民土地，而是透過土地的集體所有制和農民的組織化而推動完成了工業化的國家，僅僅這一點，就可以說明「具有中國特色的社會主義」並不是一句空洞的口號。

（本文轉載韓毓海新書《五百年來的中國與世界》，如果出版）

http://mag.udn.com/mag/world/storypage.jsp?f_ART_ID=471818

中國如何解決經濟的結構性問題

俄新網, 俄新社記者葉連娜‧庫茲明娜、高懿潔, 08/28/13

中國經濟存在諸多新老問題

中國對出口的依賴是危險的。李新說：「其次是產能過剩問題，由於中國近30年來實行出口導向戰略和投資拉動的經濟發展模式，形成了龐大的遠遠超過國內市場需要的產能，而全球經濟危機致使西方國家一方面減少了進口，另一方面採取了貿易保護主義政策，致使中國的出口受阻，產能過剩。」

樊明太認為：「其次，中國經濟也確實到了轉型的階段，因此我們希望稍微犧牲一點經濟增長速度，加快經濟轉型，即從高能耗到低能耗，從高出口向中等出口，從高度依賴自然資源向適度依賴自然資源，從高度依賴勞動密集型產業和投資向適度轉軌。」

他介紹說，「中國的外貿也需要進行轉型，應當從價值鏈的低端往具有高附加的產品方向發展，並且這應當成為未來中國經濟繼續增長的引擎」。

除了老問題之外，在「不惜一切代價發展經濟」的那些年裡，中國出現了新的社會和生態問題。

在GDP增速提高的背景下，社會中的經濟不平等也同樣愈演愈烈。波波夫認為，這對中國來說是最危險的，因為這種不平等威脅著國家機構的效率。2012年，中國尼基系數（傳統上用來衡量社會不平等的系數）達到社會危險指標0.474（俄羅斯2010年為0.420）。

波波夫認為，尼基系數的精確度不如以下指標，如：每10萬人中的謀殺犯罪率（Crime rate per 100000 inhabitants），以及億萬富翁人數。如果把中國和俄羅斯對比，中國在遭謀殺犯罪人數方面（中國這一指標是3.2，俄羅斯是10.2）和億萬富翁人數方面都更為成功。雖然中國現在的億萬富翁人數比俄羅斯多，但與俄羅斯不同的是，他們沒有任何政治權力，而且他們的財富在國家GDP中所占的比例低得多。因為中國目前狀況不錯，不平等目前沒有導致機制效率下降。

中國已經意識到，不能只把經濟指標擺在首位，社會政策也需要加強。在中國共產黨第18次代表大會上，與會者定下了2020年GDP城鄉居民人均收入要比2010年翻一番的任務。按照經濟學人信息社（Economist Intelligence Unit）的數據，今天這個指標是人均年收入6190美元。當居民人均收入達到1.2萬美元時，中國將躋身「高收入國家」。

波爾特季亞科夫介紹說，但是，這裡等待中國的是「中等收入陷阱」——即人均收入達到美國人均收入22%至55%水平的狀態，每個國家在致富道路上都要經過這一步。韓國和台灣成功避開「中等收入陷阱」，而阿根廷已經在這個階段徘徊了100年。目前尚不清楚，中國是否能成功避開「中等收入陷阱」。

中國的生態狀況也越來越引起人們的擔憂。按照2008年世界銀行的報告，全世界污染最嚴重的20個城市中有16個在中國。中國不久前成為全球最大的溫室氣體排放國（CO2 和SO2）。

波波夫說，「有意思的是，在污染與美元GDP的比率方面，中國超過美國，但如果從人均污染來看，中國的人均溫室氣體排放量占美國的五分之一。中國同意減少能源消費，但對西方國家也有同樣期待」。

生態問題、社會問題和深層經濟問題的解決，需要中國重審國家經濟發展的模式。李新說，中國政府對此作好了準備，為了解決深層次和結構性問題，徹底實現經濟發展方式的轉變，中國政府將不惜經濟放緩，不再強調「保增長」。

向新的經濟模式轉型

按照李新的資料，中國中央政府計劃採取系列措施，解決國家經濟的結構性問題。包括：進行經濟結構調整，一方面調整產業結構，另一方面縮小城鄉和東西地方經濟差距，加大對農村和中西部地區的投資力度和政策放寬。進行金融體制改革，允許民營銀行的出現，逐步放開利率和匯率限制，一方面加快金融創新步伐，另一方面加強金融風險監管。在房地產領域採取限購、貸款審查、貸款利率等方面的措施，抑制房地產投機及其造成的房地產價格持續攀升。

新的經濟模式將重心從出口和投資轉向刺激國內消費、經濟整體現代化，2030年前建成「高收入社會」。

確實，如果說中國實現現代化擁有生產和人才資源，但在國內消費的問題上中國人「機動空間」並不多。波爾特季亞科夫說，消費能力直接取決於GDP在「儲蓄」和「消費」方面的分配。中國的特點是儲蓄比例高。按照經濟學人信息社的數據，2012年這個數字是46.5%，這在世界大型經濟體中是最高指標。

他說，「私人大量儲蓄的存在必然不意味著國內的消費增長。目前下列問題還尚未解決，如：不發達的保險體系、住宅和醫療費用上漲」。

樊明太從另一方面來看這個問題。他認為，中國人的購買力要比官方統計數據高得多。還有一點，目前很多中國人專門出國去消費。他說：「國人去境外旅游時的消費能力有目共睹，如果算上這部分，中國人的消費能力絕對不止目前統計數據所顯示的水平。」中國人去國外消費，其中既存在價格的因素（能夠規避國內的高額稅收），也有質量的原因，並且國外同類產品的選擇性更多樣化。"同類產品，日本產的和中國產的質量肯定不一樣。那麼有條件有機會的人肯定就願意去日本買。

「大躍進」

在過去30年內，中國GDP平均增速為9.9%，也就是說，實際上中國經濟規模每8年增長一倍，今天僅次於美國。但這不會長久：按照專家預測，中國經濟最快2017年就將超過美國。

按照清華大學教授胡安鋼的報告，到2030年中國GDP將達到世界的三分之一（中國國務院發展中心和世界銀行給出的數字是20%到28%之間）。這將讓中國恢複很久前就已經失去的經濟統治地位。按照英國經濟學家安格斯·麥迪森（Angus Maddison）的研究結果，1820年，中國以占世界GDP的32.9%的數據居於世界經濟統治地位。

如果說在改革開放後的10到12年間，中國GDP增長指標浮動範圍很大（從1990年的3.8%到1984年的15.2%），那麼在過去10年內，中國GDP增長值相當穩定，不低於9%，只在2012年滑落到7.8%。

波爾特季亞科夫認為，胡錦濤主政的10年可以被認為是成功的「大躍進」，因為「中國經濟增長伴隨的是實體經濟的增長」。得益於此，中國不僅成功使GDP達到世界大國水平，還發展了本國的生產基地，取得了技術生產的新地位。

波波夫認為，雖然經濟增長速度放緩勢在難免，但將逐步發生。但如果中國能夠把GDP增速保持在哪怕是5%的水平上，那麼再過10年，它將躋身「發達國家」行列中。

（作者觀點不代表俄新社觀點）

【2013/08/27 俄新網】

(文章來源：俄新網 中國的經濟高增長是否將持續下去？（二）)

http://mag.udn.com/mag/world/storypage.jsp?f_MAIN_ID=235&f_SUB_ID=5801&f_ART_ID=473807

中國的經濟高增長是否將持續下去？

俄新網, 俄新社記者葉連娜‧庫茲明娜、高懿潔, 08/28/13

俄羅斯高等經濟學院教授、美國愛荷華州卡爾頓學院教授弗拉基米爾‧波波夫說：「中國的經濟增長因各種客觀原因放緩。問題不在於為何放緩，而在於為何過去30年間未出現放緩。例如，日本和韓國的經濟在增長20年後放緩，而且這兩個國家得到了西方支持，這種現象被稱為『邀請式發展』（development by invitation）。中國沒有這種特權，它是在缺乏『邀請』的情況下發展的，而且持續了30年。這已經成為謎團，也是個奇蹟。即便中國的經濟增長明天就結束，我們也需要分析這種奇蹟。」

俄中兩國專家接受俄新社記者採訪期間講述了，為何中國必須保持高速增長，為此需要做什麼，以及如果增速放緩將會發生什麼。

為何需要高增長？

專家們認為，經濟發展放緩首先可能帶來的是嚴重的社會問題。勞動力市場上勞動人口逐年「增加」，是迫使中國加強經濟增長的一個主要原因。

波爾季亞科夫說：「中國大約70%的大學生畢業後找不到工作。這對社會安定構成威脅，要知道大學生和大學畢業生恰恰是政治上最為積極的居民群體，有能力進行社會抗議。」

俄羅斯高等經濟學院教授、美國愛荷華州卡爾頓學院教授弗拉基米爾‧波波夫說：「儘管中國成功地把人口增長控制在每年1%的範圍內，鄉村人口仍然在湧往城市。大約一半這類鄉村人口（占中國居民的四分之一）應當從事工業生產，需要為他們確保工作崗位。」

此外，10%的經濟增長率意味著，居民收入幾乎每隔7到10年就會增長一倍。在經濟增長放緩的情況下，收入的增長也將放緩。無疑，這將引起社會不滿。

專家們指出，當前經濟模式的轉型也需要使經濟增速保持在一定水平上。

上海國際問題研究院世界經濟研究所研究員、俄羅斯中亞研究中心主任李新認為，中國經濟增長率在今後五年將會穩定地保持在7.0－7.9%之間。既不會發生戲劇性的嚴重衰退和危機，也不會再出現9%以上的高速增長。這個增長速度將有助於中國在像過去一樣扮演世界經濟發展發動機的同時，解決經濟結構性的問題 。

波爾季亞科夫認為，最適宜的經濟增速不應超過6%。他說：「與其說是預測，不如說是理性的分析。」

經濟增速緣何放緩？

波波夫說：「像美國等發達國家處於技術極限時，是無法保持高速發展。而只能在趕超期間保持較高的發展速度。隨著中國越來越靠近技術極限，將出現經濟增速放緩的情況。」

他說，此外，中國的經濟增長因經濟政策方面的錯誤而出現了問題。眾所周知，借助巨額外匯儲備的積累，中國在相當長的時間內維持著人民幣的低匯率，這首先為該國的出口導向型經濟提供了機遇。人民幣匯率近來在美國施壓壓下的攀升對經濟增長有所打擊。

李新認為，中國經濟增長放緩是全世界經濟過程的一部分：世界金融危機、美日兩國熱錢的流動，歐盟經濟出現負增長。目前，全球經濟危機仍在持續。世界經濟仍然處於下行區間。影響中國經濟增長的因素除了上述世界經濟整體下滑的趨勢，歐盟經濟負增長，美、日量化出來的「熱錢」湧入和撤離等外部因素之外，國內經濟也存在一些問題。

中國社會科學院數量經濟與技術經濟研究所數量金融研究室主任樊明太同意他的意見。他說：「在當前，適度調整，使其下滑，應該是一種合理的行為。其中既包括按經濟波動內在規律，又包括經濟增長所需的自我調節。」

他說：「中國經濟即將進入轉型階段，這並不意味著經濟增長就沒有潛力了。我們看好的經濟增長點包括對社會保障和基建領域的投資，後者和美歐的『再工業化'相似。此外，中國經濟存在從發達地區向中西部地區產業轉移的空間，這是國外所沒有的。」

經濟增速放緩還有一個因素：經濟模式不平衡，不能確保長期穩定發展。

在這種模式下，廉價勞動力是中國主要競爭優勢之一，而中國可能很快失去這種廉價勞動力。近年來中國生活水平上升，工資上漲。專家們預言稱，未來幾十年內勞動人口人數將大幅下降。俄羅斯政治研究中心研究員葉夫根尼‧佩捷林說，「近五年（2011-2015）對於中國的發展來說是一個極端重要的時期，因為正是在這一時期中國將出現所謂的劉易斯拐點，即勞動年齡居民占最大比例的高峰」。

是否需要刺激經濟增長？

樊明太認為，中國政府可以不刺激經濟增長，但絕不能不穩定經濟增長。

他說：「中國國務院總理李克強最近也說了，中國經濟運行的上限是防通脹，下限是保就業。但問題是，我們目前所看到的就業數據並不能完全反映就業現狀。一定要採取措施刺激和保障本地就業。至於物價方面， 國際上目前也有一種看法，認為物價不應只和消費品價格挂鉤，投資品價格和服務行業等價格也應當被考慮進去。應該說，中國目前的物價水平仍是比較高的。」

中央政府的努力常常不僅無助於經濟增長，反而導致形勢更加惡化。

李新說，與此同時，對經濟採取刺激政策，大量資金沒有進入實體經濟（一方面已經出現產能過剩，另一方面由於利息高和貸款風險大而使大量中小企業融資困難），而是進入了房地產和金融領域，推高了房地產和金融泡沫。

他說：「地方政府為了進行基礎設施和城市建設，組建投融資平台早已有之，2009年為了應對全球經濟危機，中國人民銀行發布文件『支持有條件的地方政府組建投融資平台，發行企業債、中期票據等融資工具，拓寬中央政府投資項目的配套資金融資渠道』。銀監會的材料顯示，地方政府通過此平台融資已達10萬億元，未來三年將有三分之一貸款到期，而許多地方政府並未建立貸款償還機制，同時政府財政收入也在下降，債務違約風險增大。」

（文章來源：俄新網 中國的經濟高增長是否將持續下去？（一）)。作者觀點不代表俄新社觀點）

【2013/08/26 俄新網】

http://mag.udn.com/mag/world/storypage.jsp?f_MAIN_ID=235&f_SUB_ID=5801&f_ART_ID=473806

中共三中改革方案的經社搭配

【泰國世界日報/社論】

中共18屆三中全會，預定9、10月間在北京舉行，這次中共中全會早已內定，要制定出新一輪改革方案。而新一輪改革方案中，備受關注的政治體制改革，將有老口號而無新內容，改革的焦點，放在經濟體制改革上，而又把社會體制改革，拉出來與經濟體制改革搭配。

自去秋中共18大以來，圍繞中共18屆三中全會的改革方案，中國社會左右兩大陣營、中共黨內各特殊利益集團，展開一場沒有硝煙的惡鬥。惡鬥的主要結果，就是放緩「全面改革」步伐，將政治體制改革束之高閣，換來「深化」經濟體制改革，以及推動部分社會體制改革，以之為經濟體制改革的搭配。

北京官場傳出的說法，即將拍板的新一輪改革方案，要打出一面「建立規範、高效、公平的社會主義市場經濟」的大旗，以之與中共18大提出的小康社會和翻兩番的大戰略目標相勾聯。而在社會體制上，則有配合經濟體制改革的相關制度革新，如戶籍管理制度的改革，以及民眾權利保障的制度安排等等。

這次中共領導層未能舉起政治體制改革的大旗，而以經濟體制改革為核心，對此中國內外有很多人失望。但必須看到，今天的中共領導層，以維持中共的執政地位為核心任務，既要把中共黨的利益擺在頭等大事，則不可能也不敢啟動有可能動搖中共執政地位的政改。

同時，實力強大的多個特殊利益集團，也不斷在敲打中共新的領導層，令其不能有「出圈」之舉。是以，上屆領導層中還有溫家寶的政改一家之言，這次中央政治局七常委可能將集體沉默。

反過來，由於無力政改，反而在經改上要多走一步，這可能是現有歷史條件下，必然的選擇，對當下的中國經濟來說，可能反倒是福音。這是因為，改革「頂層設計者」認定，受改革複雜性增加和利益集團干擾，說不提政改，經改步伐已有放緩，部分體制僵化、束縛經濟發展潛力釋放的問題極為突出。

於此，經濟首先是要發現新動力，為今天的經濟要找到新活力，所以要發展宏觀的、更開放的經濟體系，要創造微觀的經濟活力。要實現這一構想，也只能在經濟體制上入手。中國建設市場經濟體制已逾20年，但不僅還沒有形成全國性統一的大市場，也沒有形成平等競爭的公平市場，更沒有形成對內對外都具開放性的市場。所以新一輪改革，要重構更市場化的經濟體制。

要實現以上兩點構想，切入點還在政府，所以政府行政管理體制的改革，將是改革的突破口。更有效率、更加公平的資源配置，成為這方面改革的主攻方向。處理政府和市場的關係，成為改革的大重點。

至於市場經濟體制改革的具體進程，又將兵分多路，重點圍繞重畫中央與地方利益的政府事權、財權畫分的財稅體制改革，圍繞建設新型城鎮化的系列改革，以及由利率、匯率市場化為主的金融體制改革等，分兵合圍。

新一輪改革聚焦經濟，但在深化市場經濟體制要求下，在沒有政治體制改革的配套下，當局不能不把社會體制的改革創新，推上台來。這一方面原因是經濟體制改革要深化改革，必然提出社會體制改革的要求，比如推動新型城鎮化建設，不解決戶籍制度的改革，根本就寸步難行。因而改革方案將透過社會體制改革創新，試圖調動各方面積極性，試圖增強社會發展活力。

另一方面，與經濟體制改革定下一個重要目標，要適度分利於民，讓民眾多少享受到經濟體制改革的成果；社會體制的改革，也要化解官民矛盾、鞏固執政體系為主要目標。於此，社會體制改革會提出實現社會公平正義，透過制度安排更好保障人民群眾各方面權益的口號。但目前這些改革，都只停留在口號上。

【2013-08-19/泰國世界日報】

http://mag.udn.com/mag/world/storypage.jsp?f_ART_ID=472343

Is China Doomed?

Rajan Menon, 08/09/13

Between 1978, the year Deng Xiaoping’s sweeping economic reforms were launched, and 2011, China’s GDP increased by an average of 10 percent annually, three times that of the global economy. Now the boom times may be over.

By mid-2013, economic growth had slowed to 7.7 percent. That’s still a roaring pace compared to the rest of the world. Europeans, Americans and even Japanese might say about China’s slippage, “We should all have such problems.” Still, in thirty-five years, the Chinese polity hasn’t had to handle a prolonged economic slowdown and one may be in the offing. Hence the debate on what the deceleration could portend should it get worse and linger.

Is China headed for upheaval? The argument that it is seems plausible. Eye-popping growth rates and the accompanying increase in living standards -- and of course the state’s massive machinery of repression -- have been critical to maintaining political stability and public support for the Communist Party. Or is Beijing so skillful, so flush with foreign-exchange reserves -- and hence with the capital needed for priming the economy and managing financial crises -- that slower economic growth is no big deal? Don’t look to the experts for enlightenment on which take is true: they see the same data but draw different conclusions.

We’ll get to those incongruous assessments soon, but first, some context on China’s remarkable achievements since 1978. (While some China watchers think Beijing cooks the books, they do concur that the country’s economic transformation has been breathtaking.) China’s GDP, measured in purchasing-power parity using current dollars, was $248 billion in 1980; by 2012 it had soared to $12.3 trillion. Per-capita GDP -- a useful measure of prosperity, even though it doesn’t reveal income distribution, the inequality of which has soared in China -- has likewise surged, from $205 (at purchasing-power parity) in 1980 to $11,316 in 2011. Together, massive investment, breakneck economic growth, sharp declines in population growth, the advent of universal literacy and big increases in the number of people with a higher education have helped pulled six hundred million Chinese out of poverty.

Other numbers illustrate China’s economic makeover. In 1978 China accounted for about 2 percent of the value of global exports. By 2010 its share had risen to 10 percent, and the total value was $1.5 trillion. This success in the global marketplace was achieved to no small extent at the expense of the world’s other economic behemoths, Japan and the United States, whose shares declined. What makes this particularly noteworthy is that China’s GDP, though it recently surpassed Japan’s, is still smaller America’s, which was $15.7 trillion in 2012. Yet the value of China’s trade last year was $3.87 trillion, eclipsing America’s total of $3.82 trillion. Even allowing for differences in the two economies’ relative dependence on trade this was headline-grabbing news. And it’s not just the value of what China sells the world but the difference that’s emerged in what it sells. Staples such as apparel, toys, shoes and basic electronics have been replaced by machinery and equipment, which account for over 50 percent of China’s exports, compared to just over 25 percent in 1995. Whether it’s energy, banking or telecommunications, Chinese companies have a global presence and are competing with American, European, South Korean and Japanese multinational corporations.

Okay, so what’s the problem then? It’s on this question that informed opinion is split. Paul Krugman is sure that the decrease in China’s economic-growth rate portends “big trouble” and that the signs are “unmistakable.” He and others pessimists chalk up China’s economic success to a combination of a vast rural population that has been available for induction into the industrial sector; low wages for workers, a function of an abundant supply of labor from the countryside; massive investment at the expense of consumption; and an exchange-rate policy that keeps the value of China’s currency low and its export earnings high.

The old paradigm, effective though it was, is starting to crumble. We’ve seen this before. The Soviet economy started slowing in the 1960s once it became harder -- because of falling population-growth rates and the drying of the rural labor reservoir -- to rack up big growth rates by pumping more people and money into manufacturing. The big difference is that while total-factor productivity (output per composite unit of labor and capital) didn’t pick up the slack in the USSR, in China it has increased significantly over the past two decades. Still, with Europe mired in recession, America posting anemic economic-growth rates and adding few jobs, and India’s and Brazil’s economies slowing down, it’s going to be harder for China to continue banking on big sales abroad to sustain rapid growth. So a lot hinges on whether Beijing finds a new way to sustain high growth, one that goes beyond basic industrialization and catching up to the West and sets trends in innovation.

The experts who reject Krugman’s apocalypse soon scenario are confident that Beijing will adapt to slower growth and diminished demand abroad by “rebalancing.” They don’t deny that China’s economy is slowing or that that could pose problems. They insist that China will simply shift to growth that’s slower and less reliant on investment and exports and that relies more on domestic consumption, with the government using its cash bonanza to boost employment and income as needed.

Sounds nice, but it may not be so easy. To begin with, the “rebalancing” metaphor is too pat. It conjures up the image of a bicyclist who’s tilting too far left or right and merely needs to adjust body weight a bit before pedaling happily onward. Would that it were so simple. Despite the huge increase in China’s per-capita income over the past three decades, today it is still only $9,300. It remains well behind America, Europe, Japan and South Korea and ranks 123rd in the world, closely trailing the Dominican Republic and the Maldive Islands. It also doesn’t help that 12 percent of China’s population lives below the officially established poverty line ($3,630). That’s not a big proportion; it’s smaller than America’s and represents a huge decline from over 80 percent in 1981, but it amounts to 130 million people who can’t generate much of what economists call “effective demand.” If you’re going to rely on consumers to power growth it helps to have a population with abundant disposable income.

Then there’s income inequality, another barrier to rebalancing. The greater it is in a country with a low per-capita income, the harder it will be to foster consumption-driven economic growth quickly. And China’s income distribution is highly skewed. One common measure of economic inequality is the Gini Index, which measures income distribution. The lower a country’s score, the more equal its income distribution, and vice versa. Sweden’s Gini score is 23, Germany’s 27, the EU’s as a whole 30, Japan’s 37, and America’s 45 (nothing to be proud about). China’s is 47.4. This is another reason why rosy forecasts involving rebalancing should occasion skepticism, the more so because in China high inequality (the super-rich elite can consume only so much) and low per-capita income are accompanied meager retirement and health-insurance benefits that don’t offer most Chinese much protection during adversity or old age.

Speaking of aging, China is doing so rapidly. And its total fertility rate, the average number of children a woman is projected to have during her childbearing years, is now 1.55 (2.11 is required to maintain the size of a population). This means that labor shortages loom, an increasing proportion of the workforce will consist of retirees, and revenue will have to be reallocated to care for the growing proportion of elderly. Yes, Europe and Japan also have aging populations, but the difference is that these are (despite Europe’s current problems) relatively wealthy places. Moreover, they confronted the demographic transition after they became prosperous. China is facing it now, when it’s not.

China’s challenges aren’t limited to its economy. Protests -- sparked by outrage over corruption, environmental degradation, and the abuse of political authority -- have risen sharply: the number of incidents reached 180,000 in 2010, double that of 2006. Despite big investments that have produced a literate and wealthier population in China’s minority regions, unrest among Tibetans and the Uighurs of Muslim-Turkic Xinjiang continues, not surprising given the vital role that the intelligentsia has played in producing nationalism. Chinese leaders no longer deny the dangers of separatism or whisper about it in secret conclaves. They speak about it openly and seem flummoxed as Tibetans continue to immolate themselves and riots and bombings persist in Xinjiang.

Now, the Chinese state has a massive a coercive apparatus to quell rebellions and spends more on it than on the People’s Liberation Army. Revolution is not around the corner. What we don’t know is how and to what extent the economic slowdown could produce instability and whether non-economic sources of discontent will prove harder to manage in times of hardship, especially in an age in which social-media-savvy youth have shown that they can communicate and mobilize in multiple ways.

Some commentators -- Ian Bremmer among them -- argue not just that China’s leaders can manage fine with a 7.5 percent rate of economic growth or even less but also that they may even welcome it. The proof presented to back up this claim is shaky at best. Bremmer assures us that Chinese officials have stated that they’re comfortable with the slowdown (I guess that settles it then) and he adds that slower growth will provide them an opportunity to ram through much-needed reforms. But the reforms being discussed will all require sacrifices by the elite and the masses and will therefore be harder to implement in (relatively) tough times. The rich and powerful will offer more resistance than the masses; they have more to lose and greater influence to use.

Then there are China’s main banks, which have been the source of credit for state-owned industries (SOEs), many of which are running red ink, and local governments that have borrowed heavily -- they owed $1.7 trillion in 2011 -- to launch mega construction projects. It’s hard to believe that these banks, companies, and local political bosses won’t find it much tougher, albeit for different reasons, to conduct business as usual as the economy slows. With $3 trillion in reserves, the Chinese government has plenty of cash to throw at problems, and its central bank can step in when it’s a matter of bad loans made in local currency by local banks. Besides, China has a respectable debt-to-GDP ratio to boot: 50 percent. That’s up from 37.8 percent in 2011, but a far cry from Japan’s at 236 percent or ours at 107 percent. But with China’s banks having extended, at the government’s urging, trillions of dollars in stimulus following the 2008 global economic slowdown, banks’ adeptness at circumventing official lending limits, in a variety of ways and off the books, and the huge expansion of “shadow banks,” the true magnitude of a financial crisis that could be triggered by a sluggish (by Chinese standards) economy may be hard gauge.

No matter their phlegmatic public pronouncements, China’s leaders don’t regard bad bank loans and debt-laden companies and local governments with equanimity. They can’t be unruffled by a slowing economy that could aggravate the problems of creditors and debtors who are already in distress. The government already did a $650 billion bank bailout between 1998 and 2005, and now there are murmurs that another is in the works. Leaders everywhere are good at whistling in the dark and putting a gloss on things. China’s are no exception.

What’s the upshot? No one can predict accurately at what point slower growth will start producing political turmoil on a scale that’s unprecedented in the China that Deng made, what the magic number is, or even whether there’s an iron connection between economic and political crises. Yet the increase in capital flight from China and soaring applications for American and European residential visas by well-heeled Chinese suggest that the elite is hedging its bets. Krugman may be overstating things, but the rebalancing camp is too sanguine.

This much is certain: China’s leaders are in uncharted waters, and because of the diminishing utility of the established formula for rapid growth their maps may be of questionable value. There will be disagreements among them, not just about the appropriate the solutions but also about the roots of the problem. The one point of agreement will be that that tough decisions loom and will have to be taken under circumstances far less favorable than those that have existed during the last thirty-five years.

Rajan Menon is the Anne and Bernard Spitzer Professor of Political Science at the City College of New York/City University of New York, nonresident senior fellow at the Atlantic Council and the author, most recently, of The End of Alliances.

http://nationalinterest.org/commentary/china-doomed-8857

Will China's economy crash?

Michael Pettis, 07/29/13

Editor's note: Michael Pettis is a professor of finance at Peking University, a senior associate at the Carnegie Endowment for International Peace and author of "The Great Rebalancing" (Princeton University Press).

(CNN) -- After many years of euphoria over China's rapid growth and the country's apparently inevitable rise to global economic dominance, the China story has taken a serious turn for the worse. China, it now seems, is about to collapse, and along the way it may well bring the world economy down with it.

Fortunately, the new story may be as muddled as the old one.

China's economic model has relied heavily on investment and debt. It shouldn't be a surprise that after many years of tremendous growth driven at first by badly needed investments, Chinese spending on infrastructure and manufacturing capacity is slowing down.

During the same period, debt levels surged as borrowed money poured into more highways, airports, steel mills, shipyards, high-speed railways, and apartment and office buildings than the country could productively use.

A few economists predicted as far back as 2006 that China would face a serious debt problem. By 2010, it became obvious even to the most excited of China bulls that this was indeed happening.

To protect itself from the risk of a debt crisis, China must bring spending to a halt. Beijing now wants to rebalance the economy away from its excessive reliance on investment and debt, and to increase the role of consumption as a driver of growth.

But this cannot happen except at lower growth rates.

So what happens next -- will China collapse? Probably not. A financial collapse is effectively a kind of bank run, and as long as government credibility remains high, banks are guaranteed and capital controls are maintained, it is unlikely that China will experience anything like a bank run.

What is far more likely is that in the coming years, China's gross domestic product growth rate will continue to decline as the country focuses on stimulating consumption.

Growth rates during the administration of President Xi Jinping are unlikely to exceed 3% to 4% on average if the economic rebalancing is managed well.

Will the slower growth rate be a disaster for China? Certainly, it would be huge departure from the growth rate of roughly 10% a year for nearly three decades. Would much lower growth rates create high unemployment and huge dislocations for the economy? Some are worried about such scenarios. But the Chinese economy has so far shown a lot of resilience despite passing storms such as the global financial crisis.

Beijing has huge challenges ahead. China's growth has been a boon to large businesses, the state, the powerful and the wealthy elite. What the Chinese government needs to do is recalibrate growth so that average household incomes can rise and consumers have more money to spend.

This will not be easy to pull off, but there are positive signs. Xi's government seems determined to make the necessary changes, even at the expense of much slower growth.

Even if GDP growth declines but average Chinese household income grows at 5% to 6% a year, it would put China in the right direction.

As for the rest of the world, there's no reason to panic over China's economic slowdown. Contrary to popular beliefs, China is not the global engine of growth; it is merely the largest arithmetic component of global growth. What drives global growth is demand. China, with a large trade surplus, is not a net provider of demand to the world.

What matters to the world, in other words, is not how fast China grows but rather, how its trade with foreign partners evolves. If China rebalances in an orderly way, its imports of manufactured goods and services should rise faster than its exports. This will be good for the world.

What's more, manufacturing industries around the world that lost out to China in the export business will benefit. When wages rise for Chinese workers -- so that they have more money to buy goods and services at home -- it means other developing countries will have a chance to compete for exports if they offer lower labor wages.

There is no doubt that Beijing has a long road ahead in terms of managing a huge economy, but as of now there should be nothing surprising or unexpected about the slowing growth of China. It will probably benefit the Chinese people and the global economy.

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http://edition.cnn.com/2013/07/29/opinion/pettis-china-economy/index.html