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Premier calls for action on economic issues [Copy link] 中文

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Post time 2016-2-17 09:03:37 |Display all floors
A Chinese worker assembles a new energy car on the assembly line at an auto plant in Zouping county, East China's Shandong province, Dec 16, 2014. [Photo / IC]
Be more responsive to the public and to international concerns, key members of the State Council are told

Premier Li Keqiang has called for key members of the State Council to be more responsive to the public and to international concerns ...

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Post time 2016-2-17 09:03:38 |Display all floors
Given that capital control is likely to be out of the question, some suggested that China should launch a massive stimulus program and at the same time let the RMB free float to market levels as the best option for China to get out of its current economic dilemma. While a massive stimulus program (especially at the present time) does carry many of its own problems, I would suggest that a moderate stimulus program together with my suggested SOE reform, might be just workable and could turn out to be a triple WIN solution.

In response to a slowing economy and an economic model that needs restructuring, my proposed SPS model (see my previous comments for details) could be a win-win-win (triple win) solution. We start with SOE restructuring, which calls for the complete privatization and the complete divestment of governments from SOEs by exchanging governments' current equity share holdings in SOEs for my model's SOE Special Preferred Shares (SPS) (could also consider perpetual bonds with PUT OPTIONS, but SPS offers more flexibility given they are waived from taxation like bonds). This, in turn, will be followed by NEW (or re-issues)common share issues by the SOEs for new private capital open to both domestic and foreign investors. This will likely attract massive capital funds from domestic and foreign private investors (especially the latter as an opportunity for them to enter the China domestic market and thus will be increasing FDI massively). This will again, in turn, result in a moderate massive economic stimulus program (this time mainly from private investors with much from massive FDI inflows) in terms of industrial upgrading and renewal etc. (of the SOEs). This massive economic stimulus program, in turn, will provide an opportunity for allowing RMB to initiate market free float without adverse reactions (thus may avoid probable depreciation if without such a massive stimulus program). This is indeed a triple win solution, allowing SOE reform, a massive economic stimulus program to the economy largely provided by private capital and also RMB market free float all at the same time. Note: the government will still hold significant leverage over the SOEs under the SPS model.

The above scheme, presenting a two stimulus programs, one provided by government initiatives and one entirely through private funding and initiatives, and launching SOE reform and RMB free float all at the same time, indeed provides a triple WIN solution to China's current economic dilemma.

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Post time 2016-2-18 08:12:22 |Display all floors
consumer demands is the governing factor of capitalist economic system.
Military demands play a huge role too.
There are just so many cars, stoves and wash machines people need.
When the demand for these goods decrease, manufacture will slow down.
China is a very new comer to this unplanned economic system and kind of expect production can go on at fast pace forever.
There is  nothing to be alarmed about a slow down as people's need will rise again and thus revive manufacture.
American unfair trade practices against Chinese imports adds another factor to China's relative slowdown.
To expand market fro Chinese goods which are good and fair priced should be a priority for the government and business.
I have the uttermost confidence for Chinese economy which is the most efficient engine in the world with her skillful and hardworking work force.

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