Nurturing the Chinese Economy  

Oleh:

Studwell, Joe

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Far Eastern Economic Review vol. 172 no. 10 (Dec. 2009), page 12.
Topik: China; Economy; Monetary Policies

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Perpustakaan Pusat (Semanggi) Nomor Panggil: FF21.22 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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The life of a contemporary China-watcher may be measured in "prognosis phases." These last about five years and come in only two flavors: ebullient and cataclysmic. In my brief involvement with China, I have so far experienced three prognosis phases: "China Takes Over the World I (1992-1997)", "Oh My God, It's a Disaster I (1998-2002)" and "China Takes Over the World II (2003-2008)." There are now strong indications that we are entering "Oh My God, It's a Disaster II (2009-?)." The worriers are agonizing over three inter-related fronts. The first is that China is experiencing the beginnings of an "asset bubble," involving uncontrolled speculation in property and stocks. The culprit here is loose monetary policy and the vast fiscal stimulus program being pursued by the Chinese government to maintain brisk growth in the midst of a worldwide financial crisis. A reinstated currency peg to the U.S. dollar, the argument runs, exacerbates the asset-bubble risk because it links China, inappropriately, to U.S. monetary policy and very low interest rates. Robert Zoellick, the World Bank president, has flagged the risk of asset bubbles in China and Asia because other countries are following similar monetary policies. The region's best-known horror story in this respect is Japan between 1985-87, when the increase in property and stock values was 25 times the increase in wages and salaries. At the time, Japan had nine out of 10 of the world's biggest banks by assets and, in 1988, the Tokyo stock market became 50% bigger by capitalization than New York's.

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