Macroeconomic Analysis for First Quarter 2013

Authors

  • Shuguang Zhang Unirule Institute of Economics
  • Chi Zhang www.china-review.com

Abstract

In the first quarter, China’s GDP grew 7.7%, industrial value added rose 9.5% and the CPI climbed 2.4%, lower than the same period last year and last quarter, as opposed to general predictions. But the decelerating growth presents a good opportunity for economic restructuring and transformation. The balance of broad money (M2) exceeded RMB 100 trillion. However, we cannot determine whether the issue was excessive simply by observing the operation of monetary policy. Instead, we should further check the mechanism adopted by the government for money creation. The on-going gaming in China’s property market indicates that policy is defective, and is related to the special money creation mechanism. Finally, the Ministry of Railways was dismantled and the China Railway Corporation created to separate the functions of the government from those of the enterprise, although they are still economically bonded. By settling the ministry’s debts, property rights and operating responsibilities should be clearly defined, leading to further railway reform.

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Published

2013-07-05

Issue

Section

Brief