The Unirule Institute of Economics held a conference to announce the release of the Macroeconomic Analysis Report for the 2nd Quarter of year on July 22nd, 2010. Prof. Zhuang Shuguang, introduced the report. The report points out that China's GDP rose 10.3 percent in the second quarter of 2010, dropping significantly from that of the first Quarter. PMI experienced a continuous decline for the previous two months. There is worry that the economy will hit the bottom for the second time. In fact, the decline is just returning to normal. Risk of Chinese economy does not lie in slow growth but too fast growth, and not in the short term but in the long term. It's necessary to stress monetary policy. However, it is biased to neglect fiscal problems. The crux of the problem lies in the demutualization of and the intensifying competition among local governments, the exploding local government debts, as well the transfer of local risk to national risk and fiscal risk to financial risk. |