elements in the economy will eventually cooperate under the guidance of government policies.
Some Western institutions and media outlets have never ceased predicting a hard landing for the Chinese economy or even a cliff-diving crisis in the country. Most of the predictions have been proved wrong. The main reason is that they don’t understand the fundamental features of China’s economy. Sometimes, these observers don’t even really understand China’s economic data but draw a conclusion by applying Western historical experience.
The warnings by some Western institutions had indeed wracked the nerves of some Chinese people initially. But gradually, they came to realize the difference in the social and economic structure between China and Western countries and learned that a similar economic phenomenon may metamorphose in a different context. Chinese people have increasingly remained unruffled about the gloom-mongering predictions of the Chinese economy.
We tend to believe such an attitude is advisable because we are no longer wary of every pessimistic analysis about China’s economy and don’t see every comment as the “coming collapse of China.” Western observers have their own perspective and for many occasions we can rationally engage in discussions and talks with them and try to find out if there is anything useful for China.
The credit-to-GDP gap measures the difference between the current credit-to-GDP ratio and its expected long-run trends. The 30.1 reading for the first quarter indicates that China’s credit is expanding rapidly and such information is a valuable find although the BIS’ conclusion may be an exaggeration and distort some facts. What should deserve our attention is whether the rapid credit expansion is a result of the government’s macroeconomic control measures, where the credit flows to, whether the credit level goes in tune with the annual economic goals and if there is any connection to runaway property prices. These questions remain to be tested and answered.
China’s booming economy is on solid backing and the engine driving China’s rise. Economic security is the pillar and foundation of China’s national and social security. It is absolutely necessary for China to be vigilant to any irregular movement in the economy. But from a long-term perspective, such prudence will never conflict with our initiative to maintain the confidence of Chinese society in the economy. http://www.globaltimes.cn/content/1007399.shtml
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