China's Leaders Rethink Growth Model as Economy Runs out of Steam

choi

China's Leaders Rethink Growth Model as Economy Runs out of Steam
Barbara Demick, China's Leaders Rethink Growth Model as Economy Runs out of Steam. Los Angeles Times, Nov 10m 2013.
http://www.latimes.com/world/la-fg-china-party-economy-20131110,0,4848548.story

Quote:

(a) "In private talks, the leadership has acknowledged what Western economists have been warning about for years: The growth model that pulled China out of poverty has run out of steam.

"'They will do as much as possible under the circumstances,' said an academic who attended one of the briefings. Speaking on the condition of anonymity because of the sensitivity of the subject, he said there are more than 300 proposals on the table.

(b) "For all the hype about the China 'miracle,' economists note there are other countries that achieved huge spurts of growth in the 20th century — among them Japan and Brazil — by pouring investment into infrastructure and factories.

"'If you look at the history of the countries that have followed this growth model, rapid growth was the easy part. The adjustment process has always been brutally difficult,' said Michael Pettis, a finance professor at Peking University.

"In a new book, Pettis contends that the Chinese Communist Party needs to look less at its gross domestic product and more at increasing household incomes so that ordinary people share in the wealth. By keeping interest rates artificially low, Chinese families are in effect subsidizing the giant state-owned enterprises that can get cheap capital.

"Meanwhile, the low exchange rate for the Chinese yuan benefits exporters but leaves Chinese consumers paying far more for iPhones and jeans.

"For China's new leadership, such economic changes would mean challenging powerful vested interests.

"'For many years, what was good for the elite was good for the country,' Pettis said. 'In this big fight about how to adjust, it is always about politics. Not about what is economically efficient.'

My comment:
(a) There is no need to read the rest.
(b) "a hybrid economy sometimes waggishly referred to as 'capitalism with Chinese characteristics.'"
(i) waggish (adj): "dated  humorous in a playful, mischievous, or facetious manner"
http://www.oxforddictionaries.co ... can_english/waggish
(ii) wag (n): "dated  a person who makes facetious jokes"
http://www.oxforddictionaries.co ... ican_english/wag--2

This definition, as well as etymology, differs from wag (n, v) in "a dog wags the tail."
(c) Michael Pettis, Avoiding the Fall; China’s economicr restructuring. Carnegie Endowment For International Peace, Sept 16, 2013 (172 pages).