Chinese economy

[mavaro...@gmail.com]

Just went back home for several days. The economic outlook and
people's expectations are not optimistic. The accumulated growth from
the beginning of the year is ok but since september, the downturn of
economy is obvious and sharp. Some major SOEs have already posted
losses since september. A local branch of a major domestic bank just
can't find someone to loan its money simply because every possible
collateral's price is slumping.

The government led mass construction may not be the cure to current
dilemma. At best, it would only restore the previous economic
infrastructure, which, has been proven to be deficient. At worst, it
would only oversimplify the problem and generate more problems during
the fund injection. Overall, the political consideration exceeds the
practical economic meaning.

I am not qualified to raise any macro policy to help the economy. But
I do feel one of the basic problems Chinese economy facing is the lack
of credits. If we say US is facing credit deterioration, China is more
likely facing a credit absence. This gives birth to distrust, moral
problems, and a fragile economic framework. Direct fund injection, or
monetary policy would not have a direct impact on this problem. A
systematic solution is appropriate. This is dissimilar to the problem
western countries are facing.