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December 7, 2012
“Financing the Middle Kingdom’s recent building boom has been expensive: Estimates put local government debt alone at between $800 billion and $2 trillion, or around 13 to 36 percent of GDP. If the real estate bubble pops, financial and social crises will follow1.”
Dr. Lynette Ong discusses succession of power in China to Xi Jinping and Li Qiejiang, as well as her economic outlook. She is emphatic that China’s economic future – what takes China to the next level – will depend on its leader’s political will to build out structural reforms, social institutions such as health care, education, and social security, if it wants to graduate more of its working class into bigger consumers, as it rebalances its economy in favour of domestic-led growth, and the introduction of ‘rule of law’ – NOT continued white elephant investment spending.