|China's Economy Faces 'Green Threat'|
|by Tom McGregor||Mon, Mar 4, 2013, 12:49 AM|
BEIJING: As the world has been watching China's economic rise in the past three decades, few Westerners have noticed the country’s shift to EU and Japan-style economic reforms. Many assumed China was transforming into a capitalist nation with Chinese characteristics, but the reality is far different.
Since living in Beijing for more than three years, my biggest surprise was discovering how China likes to talk tough to the U.S. and Japan, but at the same time Chinese government officials aspire to mold the domestic economy into 'Obamanomics,' which means higher taxes, more government regulations on businesses, pushing a Green Agenda and maintaining the status quo on state-owned enterprises (SOEs).
If you carefully observe China's state-owned media, you will notice how remarkably similar it follows the New York Times on issues related to progressive ideals, such as support for the Green Movement, opposition to cutting government budgets and calls for increased government subsidies on all sectors of the economy.
And if you get a chance, just read China’s 5-year plans and you will find these themes in almost every sentence. It’s just like listening to a broken record that keeps repeating the same note. The note being, “government is the solution to everything.”
In the past few years, China had an amazing opportunity to sell off much of its state-owned enterprises and reap massive profits for government revenues, but it refused to do so. Taking the view that privatization should wait. Well, if the economy in China sputters, even if the country moves towards privatization, it will not be able to negotiate lucrative deals in selling off its assets.
Additionally, China often touted an eco-friendly economy, but the results have proven otherwise. Pollution has gotten worse and if more green regulations go into effect then that would harm the overall economy.
Meanwhile, China's economy was more about 'share the wealth for SOEs,' which means SOEs cooperate to push out privately-owned competitors and generate business deals only with SOE operators. Hence, taxpayers' funds get shifted from one SOE to another SOE, which then shows a rise in China's economy, since SOEs only agree to deals that boost profits on both ends.
Accordingly, the South China Morning Post has reported that China's economy is beginning to sputter and perhaps a grim future lies ahead.
To read the entire article from the South China Morning Post, link here:
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