China needs to devise more policies to boost consumption among the nation's 1.3 billion people to counter the impact of falling exports on economic growth. Although the government has pledged to boost consumption to sustain growth, China still face difficulties in identifying which areas and which measures China should take to spur spending. Economic policies have failed to rebalance growth away from trade and investment, with the share of consumption in gross domestic product falling to less than 50 percent from 60 percent a decade ago.
The Government may unveil a second stimulus package as early as next month aimed at spurring consumer spending as the economy is set for its slowest growth in two decades. The government has already increased subsidies for farmers to buy household electronics, cut taxes on property and is preparing policies to revive slumping car sales in the world's second- biggest auto market.
China's household consumption rate is among the lowest in Asia as households still hold large precautionary saving balances Estimates household consumption growth slowed to 5 percent in 2008 after rising at double that pace the previous year.
The U.S. economy faces the opposite problem, with consumption too high and the savings rate too low. The policies now being pursued by US to revive growth by boosting consumption aren't the solution to the country's long-term structural economic problem. Consumer spending represents more than two-thirds of the U.S. economy while household consumption's share of China's gross domestic product slumped to slightly more than 35 percent last year from 45 percent a decade ago, according to Chinese government data. This shows there is huge potential to boost consumer credit and encourage people to buy homes and cars.
This shows there is huge potential to boost consumer credit and encourage people to buy homes and cars. Does anyone learn? Credit bubbles caused the great depression, and the great recession that we are in. One might think that someone in authority would learn something from this. But they never do. China wants to follow the US to ruin. Besides from a simple Austrian economic standpoint it it not possible to have too much savings. It is possible however to have too much debt and that is where the US is right now.
China's foreign-exchange reserves dropped for the first time in five years as a result of the global financial crisis, Market News International reported, citing Cai Qiusheng, head of the investment management bureau under the State Administration of Foreign Exchange. The current figure must be lower than the peak of about $1.9 trillion, Cai told a trade forum in Beijing over the weekend, the English-language wire service said. He didn't specify which period he was referring to or give a figure. China's foreign exchange reserves $1.9 trillion at the end of September, according to Bloomberg date.
The Government may unveil a second stimulus package as early as next month aimed at spurring consumer spending as the economy is set for its slowest growth in two decades. The government has already increased subsidies for farmers to buy household electronics, cut taxes on property and is preparing policies to revive slumping car sales in the world's second- biggest auto market.
China's household consumption rate is among the lowest in Asia as households still hold large precautionary saving balances Estimates household consumption growth slowed to 5 percent in 2008 after rising at double that pace the previous year.
The U.S. economy faces the opposite problem, with consumption too high and the savings rate too low. The policies now being pursued by US to revive growth by boosting consumption aren't the solution to the country's long-term structural economic problem. Consumer spending represents more than two-thirds of the U.S. economy while household consumption's share of China's gross domestic product slumped to slightly more than 35 percent last year from 45 percent a decade ago, according to Chinese government data. This shows there is huge potential to boost consumer credit and encourage people to buy homes and cars.
This shows there is huge potential to boost consumer credit and encourage people to buy homes and cars. Does anyone learn? Credit bubbles caused the great depression, and the great recession that we are in. One might think that someone in authority would learn something from this. But they never do. China wants to follow the US to ruin. Besides from a simple Austrian economic standpoint it it not possible to have too much savings. It is possible however to have too much debt and that is where the US is right now.
China's foreign-exchange reserves dropped for the first time in five years as a result of the global financial crisis, Market News International reported, citing Cai Qiusheng, head of the investment management bureau under the State Administration of Foreign Exchange. The current figure must be lower than the peak of about $1.9 trillion, Cai told a trade forum in Beijing over the weekend, the English-language wire service said. He didn't specify which period he was referring to or give a figure. China's foreign exchange reserves $1.9 trillion at the end of September, according to Bloomberg date.
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