Chapter 36 China skepticism can be silenced

While the "China craze" in the West continues to heat up, Westerners are increasingly suspicious of China.In the eyes of economists and investors, China's development is unbalanced and unsustainable.Although the consumption expenditure of Chinese consumers is increasing, the state expenditure is still the main body of China's consumption expenditure.They generally believe that unless the Chinese economy reduces its dependence on state spending, China's economic development cannot be sustained.Like the notion that Sino-US trade is benefiting China at the expense of the United States, this perception has been proven wrong.

In 2003 and 2004, most discussions about China in the United States believed that China's development was unbelievable, but it was bound to undergo major adjustments.Because the Chinese economy is too dependent on state spending, foreign trade and foreign investment, consumer demand is insufficient, and the legal system is not sound enough.And most importantly, China's old banking system will be overwhelmed by a large number of non-performing loans.In the 2004 U.S. presidential election, China was exaggerated as an imminent threat, the U.S. economy was worrying, and the unemployment of U.S. manufacturing workers was also blamed on China.At the same time, many people warn that the danger of increased inflation in the United States is imminent, and interest rates in the United States will also rise, which will lead to a slowdown in US economic growth.

As it turned out later, this view was almost entirely wrong.Inflation in the U.S. remains low, interest rates have not risen, and economic growth remains strong.Americans' traditional way of looking at things is outdated, their data is incomplete, and their worst mistake is that they believe that China's financial system is incapable of coping with changes in China.It is true that China is facing problems in its economic development, but these problems have also received great attention from Chinese leaders, and the impact of China's economic development is almost beyond the expectations of all Americans.We have been focusing on the opportunities that the Chinese market provides to American companies, while American companies are also promoting China's financial reform.Without the role played by U.S. companies, Chinese banks and many companies could face more difficulties.None of the current analytical models take into account the impact of global institutions on China's domestic economy, but this impact is very important, and it is its existence that makes the development of the facts exceed many people's expectations.