And Even the Chinese are unusually vocal about the Risks to there Economy...........
China's Leadership Publicly Offers Downbeat Outlook of Economy
By ANDREW BATSON
Dow Jones Newswires
August 31, 2001
BEIJING -- China's top leadership has started to acknowledge that the country won't emerge unscathed from the global economic slowdown, and officials have begun an unusually frank and public discussion of the domestic economy's problems.
Zeng Peiyan, who heads State Development Planning Commission, told a group of Chinese lawmakers Thursday that "the most serious problem China confronts at the moment is the harsh international economic situation, the impact of which is coming to be felt here."
Similar opinions were reiterated by front-page editorials Thursday and Friday in People's Daily, the Communist Party's mouthpiece.
The remarkable turnaround for a regime that has historically discouraged the public airing of negative views about the economy reflects the refreshingly candid style Premier Zhu Rongji has brought to the leadership since 1998.
Mr. Zeng said a slowdown in China's export growth rate, which has plunged to 8.4% in the seven months to July from 28% in 2000, is likely to further increase unemployment and layoffs at state-owned enterprises.
Several analysts have expected a rebound in local demand and a surge in foreign investment ahead of China's long anticipated entry into the World Trade Organization to help pick up the slack.
But Mr. Zeng said domestic demand remains constrained by stagnant farm incomes and an expansion of the country's low-income urban population.
His view was shared by the People's Daily commentary.
"Insufficient domestic demand is a conspicuous problem," the newspaper commentary said Friday.
Drought Weighs on Farm Incomes
Mr. Zeng said farm incomes have actually fallen in some major grain-producing areas, in part due to northern China's drought, the worst in a decade. Industry is weak because most commercial goods are highly oversupplied, he said, while China has yet to develop a strong service sector to absorb excess labor.
However, officials haven't gone as far as to say China won't meet its target of about 7% economic growth this year. "Realizing the full-year economic growth target is completely possible," the People's Daily wrote Thursday.
The 7% target is still slower than the full-year GDP growth of 8% in 2000, reflecting the influence of a weaker external sector.
The downbeat comments within China contrast sharply with the mostly bullish views of international analysts.
Many analysts still perceive China to be the star performer of the region as other Asian economies succumb to the global slowdown and the bursting of the IT bubble.
Foreign analysts forecasts for China's economic growth also generally track tightly the government's own sanguine outlook.
In an interview with the official state-run Xinhua News Agency published Thursday, Morgan Stanley's chief economist Stephen Roach said: "Chinese economic resilience is once again coming through loud and clear. Its economy has never stood taller." |
