Stagflation Or Soft Landing, Which Will It Be For China In 2012?
Follow us on TWITTER: twitter.com Like us on FACEBOOK: www.facebook.com Facing severe domestic inflation and an overheating economy, the Chinese Communist Party (CCP ) has tightened money supply and decelerated economic growth. However, continual recession in the eurozone and in the US has hardly hit China’s export industry. In 2012, to what situation will China’s economy move forward? Will it achieve a soft landing? The issues arouse public concerns. Due to weak exports and soaring production costs, numerous business failures of small and medium enterprises have emerged in China. Surviving companies now face a year-end plight, such as loan repayment, salary payment, paying off debts to suppliers. As The Voice of America pointed out, difficult loaning, increased production costs, all hit China’s small and medium businesses hard. Some of them might find it difficult to get through the coming Chinese New Year. China’s export faces hardship owing to the sharp drop in external demand. As the most important driver for domestic demand, China’s property industry is currently in a recession, too. According to the UK’s Financial Times Chinese edition reports, China’s tidal wave of cut housing prices has moved forward to second-tier and third-tier cities, from first-tier cities. In Erdos city, Inner Mongolia, housing prices plunged by 50%-70%, with massive numbers of houses unoccupied. The city has become a “ghost town”. In 2012, will China’s economy achieve a soft landing …
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