Qiu Lin: Is The Economic Slowdown A Necessary Stage For China?

For the economic development in 2011, although the experts have different predictions, there is no statistical data to be fully confirmed, but there are indications that China's economic slowdown may have emerged.

In the financial sector, as the deposit reserve ratio continues to hit a new high, domestic banks continue to shrink the lending front in order to maintain the 75% loan to deposit ratio.

In addition, the decrease in the current account surplus is also a factor in the economic slowdown.

This shows that China's economic growth in the future will come down systematically, which means that the miracle of China's economic growth beginning in 1980 may also end.

Over the past 30 years, China's global economic position has increased from eleventh to second now. Long term and high speed economic growth patterns are rarely seen in other countries.

Therefore, many people believe that China has gone out of a unique pattern of economic development, and even regarded China's rare economic growth process as a "miracle".

Can the Chinese economy maintain the growth rate that other countries can hardly achieve? Is it true, as some people have said, because the wisdom of the Chinese government's policymakers or because China's economic development mode and growth results are not what other countries expect? Now more and more observers are beginning to worry that China's economy will probably slow down in 2011 due to rising inflation, overcapacity in some industries, expansion of government debt and asset bubbles, and will continue for a long time.

In fact, in 2008, the world

Although China has got rid of the financial crisis and has gone out of the development path different from other economies, its economic growth mode has not adapted to the development of productive forces.

Because of the imperfect reform and lack of necessary supporting system and restriction system, some industries or local governments blindly pursue GDP growth at the expense of environment and people's livelihood.

The problem is that although the GDP growth rate has exceeded 8%, signs of overcapacity have emerged in steel, automobile, textile, cement and other industries, resulting in huge waste of capital and energy.

In fact, China's economic growth rate is not as fast as possible, because the speed of economic growth is constrained by domestic resources.

Many resources have exceeded the limit of economic growth, so they have to rely heavily on imports. For example, China's iron ore and oil have more than 50% dependence on foreign trade.

In other words, if the speed of economic growth exceeds the permitted scope of domestic resources, there will be an overheated economy and a sharp rise in the price level. The result will only be excess production capacity, and the economy will inevitably suffer from big ups and downs.

The most urgent question now is: "when will China's economic slowdown be?" can we accurately judge the time of its economic slowdown? Can we identify the characteristics and specific circumstances of the country when the economy slows down? The importance of the answer is obvious.

But in any case, China's growth is real, even slowing down will be temporary, representing the possibility of a new start.

Now there is a widespread assumption that China will continue to maintain rapid growth, and that China may avoid the Middle Income Trap and leap to middle and high-income countries.

However, it is worth mentioning that in the latter half of the last century, only a very small number of countries completed the pformation. Most countries, such as Latin American countries, still struggle to get rid of the middle income trap.

In view of the huge scale of China and the challenges of a series of structural problems, it is a long way to go to achieve this pformation.

Government decision makers are aware of this too. From the second half of last year, a lot of restrictive measures have been taken to finance, real estate and other industries.

It is expected that the government will further implement loan quotas, raise bank reserve ratio, substantially raise interest rates and introduce targeted measures.

In fact,