by Chris Becker
Some more jawboning – RBA oligarchs get out of your Martin Place palace and take some notes – from Chinese authorities as it pushes “China 21st century” into the spotlight once more:
Zhu Min, vice president of the IMF and ex-deputy governor of the PBOC had this to say today (via Forexlive):
- China can accept a GDP growth of between 7-7.5%, said
- China will avoid going back to the old investment-driven growth model, particularly reducing reliance on the property sector, and push reforms to develop the economy
- Said China cannot rely much on monetary and fiscal stimulus if it wants to realize sustainable growth
- Said the impact from Fed tapering on China should be limited but warned of possible re-pricing of China assets due to higher global interest rates
Great news for the long-term Chinese economy, as it learns the lessons from the successes and failures of its western cousins, with authorities steering the beast into a more sustainable model.
This will include some pain of course – short-term and devastating for many – particularly property and commodity speculators, but in the long-term (except maybe demographically, with a similar profile to Japan) prosperity beckons for the Middle Kingdom.
The referral pain for those tied to the hip to China’s old model will be much, much worse. And last a lot longer.