FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 12 March 2015

Reform Is The Only Way Out for China Economy

Written by , GEI Associate

This is a key year for China's economy. Facing lower economic growth, decline of productivity and escape of domestic capital, China has to make reasonable marco-control adjustments to stablize economic operations while nurturing innovative small businesses, achieving an "economic new normal" and accomplishing a difficult economic transition. In all, China has to walk on long, slow road to reform.

Following up on my last topic which discussed the country's manufacturing industry, although China manufacturing PMI recovers sightly in February, it is the second consecutive month that manufacturing PMI value is below 50, which means Chinese manufacturing industry is still in a period of contraction.

In fact, the PMI numbers just represent the result of China's manufacturing structural reform. Around spring festival, a lot of world well-known factories in China are in process of shutdown and relocation, which includes Microsoft Company. They plan to close down their Nokia factory in both Dongguan and Beijing, and accelerate their equipment transport to Vietnamese factory.

Moreover, according to relevant reports, other world famous enterprises which involve, among others, Panasonic, Sharp, Uniqlo, Nike, Foxconn and Samsung also project moving their factories out of China.

As a result, miniaturization and professionalization become new features of Chinese manufacturing enterprises. Jinyuan Yao, contributing researcher in the state council, states that the main problem of "made in China" is tht the manufacturing sector is both large and weak. For example, China has the world's top output of steel, while it has to import wirerope used in cranes. China has the world's highest yield of Aluminum, but still has to import when demand peaks.

Therefore, although China's economy has yet to encounter crisis and challenge, reform is imperative to strengthen China manufacturing industry. China can no longer rely on cheap and massive labor force to stimulate economic growth. The country should speed up the development of domestic enterprises, and march toward the "new normal" as defined by Xinhua that realizes

"a shift from high speed growth to a medium-to-high one, a shift from focusing on quantity and speed to quality and efficiency in growth model, a shift from stressing production expansion to improving current production, and a shift from growth being driven be conventional engines to increasingly driven by new ones".

Furthermore, China government has to keep pace with the reform. Maintaining macro-policy stability by efficient monetary, fiscal, policy regulation is indispensable to support and steady the economic transition, the shift to "new normal".

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
Early Headlines: OPEC Strategy Fails, Amazon And State Sales Tax, Tillerson Will Attend NATO, GOP Troubles, Euro Shorts Fading, Marine 'Loves' Vlad, Russia Ready For $40 Oil, And More
The World's Most Boring Jobs
PewDiePie Weathering The Storm
American Doctors: The Prognosis Isn't Good
What We Read Today 24 March 2017
The Federal Reserve Banks Provided $91.5 Billion Remittances To The U.S. Treasury In 2016
17 March 2017: ECRI's WLI Growth Index Shows Continued Moderate Slowing Of Rate of Growth
Durable Goods New Orders Improved in February 2017
Why NASA Won't Send Humans To Venus
Rail Week Ending 18 March 2017: Short Term Rate of Growth Slowing
How Taxes And Transfers Affect The Work Incentives Of People With Low And Moderate Income
How Tourism Affects China's Current Account Surplus
Infographic Of The Day: The Habits Of Highly Successful Entrepreneurs
Investing Blog
Avoiding The Trap Of The Demo Trading Account
Snap's Pre-IPO Revenue Per User In Context
Opinion Blog
Robots, Aliens, Corporate Drones - Who Will Be The Citizens Of The Future?
Is Our Hard-wired Negativity Bias Useful Or Something To Overcome?
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
24Mar2017 Market Close: Trumpcare Collapses But Little Affect On The Markets
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved