Economic Slowdown Shows "China Model" is Unsustainable

Follow us on TWITTER: http://twitter.com/cnforbiddennews Like us on FACEBOOK: http://www.facebook.com/chinaforbiddennews The economic slowdown in China has been a focus of economic news this past week. It again sparked concerns over the so-called "China model" and China's economic prospects. The Chinese Communist Party (CCP)'s use of the "China model" in the past few decades has led to serious issues, forcing great difficulty upon China's economic transition. Additionally, factors within the "China model" itself further impede this transition. On July 17, the International Monetary Fund (IMF) published its annual assessment report on China's economy. The report warns that China's economic reforms have come to a critical state. The IMF also pointed out that China's current economic growth model is "not sustainable, and is creating vulnerability." So far, the CCP has adopted the so-called "China model" whenever there are macroeconomic problems. It's heavy handed authoritarian regime mobilizes resources and invests massively to save the market. For example, the 4 trillion yuan ($651 billion) investment and the 10 trillion yuan ($1.6 trillion) loans in 2009 that pulled the GDP growth rate to above 8%. However, economists say "investment dependency" and "Strong government" are two key problems of the so-called "China model" Chinese economist Wu Jinglian has repeatedly criticized the shortcomings of "investment dependency." He says that extensive growth at the macroeconomic level causes over issuing of money and debt accumulation, which lead to macroeconomic volatility and growth slowdown. However, the regime's repeated use of this model makes problems more serious. It's to the extent that now China even has trouble sustaining human life, with problems arising with the air, water and soil. Overseas economists are more straightforward to the "Strong Government" aspect of the "China Model." Professor Xie Tian, University of South Carolina Aiken School of Business: "If we say China's economic development follows a type of so-called model, then it is one of extreme monopoly and centralized power, combined with violent tyranny and primitive bloody capitalism." If in the planned and controlled economy era, the CCP's control of the economy caused overall poverty, then after the "June Fourth Incident" the CCP had to open up its policy on economics to extend its precarious regime, thus, it created a "Socialist Market Economy," which is neither fish nor fowl. Xie Tian: "The CCP both implemented a market economy, or the made its so-called move towards a capitalist economy, and opened markets for enterprise developments. But it also retained its political rigidity, and didn't allow fair competition, free elections, and the emergence of independent media." The Chinese authorities are directly involved in many areas of market operations. Some monopolistic state-owned enterprises seriously distort market prices and market orders. China's current wealth gap is the world's highest. Officials and the powerful accumulate capital and run overseas. People are frustrated with basic issues such as health, education and housing. Meanwhile, in order to sustain economic growth, China's people pay the price in terms of morality and the environment. Currently, the "China model" has almost exhausted the China's production capacity. Many domestic and foreign observers say that China's economic growth will slow down significantly. The outlook is not optimistic. Goldman Sachs investment management department recently issued a report saying that China's current investment over GDP is too high and unsustainable, already exceeding that of the "Great Leap Forward" era of the 1950s and the overheated investment period in the 1990s. The time to lower investment and the GDP ratio has also passed. Gong Shengli, researcher at China's financial think-tank: "The most troublesome aspect of investment is that China has no game rules, nor a sustainable legal environment." The "Strong Government" model is also considered to further escalate social conflicts. Xie Tian: "The CCP officials would not stop their pace. As long as there is no legal restrictions to their greed, and with them also realizing that the CCP is about to perish, they will not slow down and even hurry up. Disparity of wealth between rich and poor will only get worse. Meanwhile people's endurance capabilities are limited." When the "China Model" is at the edge, the CCP tries to shift from the "Investment Model" to the "Consumer-Driven Model." But the IMF said in it's report, this shift "has not yet occurred." Meanwhile, despite the need for CCP authorities to shift from 《神韵》2013世界巡演新亮点 http://www.ShenYunPerformingArts.org/