China's New Economic Cycle
Outlook Weekly
March 10, 2014
Five years have passed since the world financial turbulence in 2008. Like all other world powers,Chinais attempting to position its economy in a way that will best help it capture future growth opportunities.
In this issue,Outlook Weeklynotes thatChinaconsiders its export-oriented economic pattern unsustainable. Since the opening and reform policy was implemented in the late 1970s, Chinaís growth has relied largely on the export processing industry and export trade. Developed economies are now building a new trade system to find a way out of economic recession. The global economic environment has changed drastically, and favorable conditions forChinaare vanishing. Therefore, economic transition is a major task for Chinaís new leadership. In particular, boosting domestic demand is vital to economic growth.
Chinaís domestic demand is growing. Statistics recently released by the National Bureau of Statistics of China show that consumption contributed over 50 percent of the countryís GDP growth in 2013, with the service sector accounting for 46.1 percent of the GDP the same year. For the first time, the share of the service sector in the GDP surpassed that of the industrial sector. Furthermore, the just concluded 2014 NPC and CPPCC sessions resulted in announcements thatChinawill carry out a series of significant reform measures in economy. It is expected that the huge market of 1.3 billion people will lead to much larger economic demand.
China's Electric Vehicle Dilemma
Caixin
February 10, 2014
The year 2014 marks the fourth year sinceChinalaunched its industrialization of electric vehicles. However, even in pilot cities likeBeijingandShanghai, it remains difficult for consumers to buy an electric vehicle with government subsidies.
Local governments are only willing to pay the subsidy to local enterprises. In this case, if a resident inBeijingwants to buy an electric car from BYD, they have to pay more than residents in Guangdong Province, where the Chinese car maker is headquartered, as the governmentís subsidy is only for local buyers.
Such a subsidy policy has also affected electric vehicle manufacturers. Many enterprises have heavily invested into electric vehicles, but so far are seeing little hope of wide-scale industrialization. Against this backdrop, manufacturers have increasingly eyed the governmentís special funds and subsidies for electric car production as the only goal. This policy should be changed to better improve the industry.
Internet Investment Boom
Sanlian Lifeweek Magazine
February 24, 2014
Chinese Internet companies are expanding into the financial business by launching various Internet-based fund products. Online investment services, such as e-commerce giant Alibabaís Yuíebao and Internet icon Tencentís Wechat-based Licaitong, have appeared to take a bite out of traditional bank deposits to become a preferred method for many investors.
Emerging online investment services attracted depositors because of their more convenient services and better profit returns than traditional banks. By investing in these new financial products, private investors capitalize on the fact that their funds are no longer sitting idle. Furthermore, the risks of these new investment products are alleged to be well controlled.
The new wealth management products initiated by Internet companies have changed Chinaís financial landscape dramatically. They change small sums of common peopleís money from deposits into investment. For years, Chinaís financial market has been dominated by traditional banks, which have strict regulations on interest rates, loans and returns. With rapid economic growth, banks cannot satisfy the increasingly strong demand for various financial services. However, emerging Internet investment products have taken the lead in reforming Chinaís financial market.
Education Dilemma
Guangzhou Daily
March 3, 2014
In the past decade, the number of Chinaís graduate students has grown 10-fold. DoesChinareally need so many graduate students?
Indeed, remarkable achievements in many areas can be attributed to people who have received higher education. However, the growing number of graduate students is not necessarily a good thing. Not only will it further squeeze the job market, but it will also lead to a waste of education resources.
The current program and course arrangement at universities does not match the Chinese marketís requirements, and as a result a certain number of graduates discover they are unable to find suitable jobs. There are also not enough qualified tutors to cope with the sudden surge in the number of graduate students. If colleges continue to expand their enrollment, graduates will find it even more difficult to find proper jobs.
Improving or reforming current higher education modes is now urgent and the focus should be moved from the quantity to the quality of the students. Otherwise, society will have to endure even bleaker employment pressures.
|