Photo: EPA
The change of leadership in China is the key event of this year but also of the past decade. Many analysts call the new (fifth) generation of the Chinese Communist Party’s leadership generation “4 plus”, as if it were a hint that a high degree of continuity is ensured here.
By: Daria Manina, Talking with newsmen, the new General Secretary of the Communist Party of China Xi Jinping said the Communist Party would remain committed to the course aimed at economic development. Hu Jintao who has left his post kept saying the same for 10 years. And if the former Communist Party leader fulfilled his promises, the current leader Xi Jinping may find himself in a situation where not all his promises will be realized. Experts are sure that the economic development model that was formed by China earlier has exhausted itself. Today China’s economy relies on domestic consumption. The crisis of 2008 has shown that under the conditions when the main consumers in Europe and America are not ready to spend their money, to stake on foreign trade would not be beneficial. To raise the population’s level of income is one of the options that is expected to be helpful in raising China’s economy and in providing stability guarantees to other countries as well, Head of the Centre for Political Studies and Forecasting Andrei Vinogradov says: "The world relies on China as an economic growth locomotive. Should the growth of China’s economy continue, this will be a great support for all during a crisis. China is facing a serious problem now – to find a balance between domestic consumption and economic growth, and also between the outlooks on the two markets - domestic and foreign." There is one more step that the world is expecting the new Chinese leaders to make – new measures to strengthen the national currency. However, in this case there is a danger of losing the world markets, Head of the Analytical Department of the IFC METROPOL Mark Rubinshtein says: "This is not only an economic but also a political issue because Chinese goods will rise in price abroad, which may reduce the demand for them and cause damage to the Chinese export, the locomotive of the Chinese economy." We should not forget about the “currency wars” as well. Although China has made certain concessions, it is rather doubtful that Washington will persuade it into doing something else. Profesor Alexander Gabuyev from the Lomonosov Moscow State University has something to say about a possible fall in China’s exports. "This branch of industry, with enterprises being concentrated in the south-east of the country, creates jobs for Chinese citizens., and in case of a sharp fall in exports, social disturbances will break out there. Thus, the Chinese government has driven itself into a trap. We’ll see what will happen." We should not forget about the role which Chinese goods play in Europe – hence, the Europeans want China to face problems. Today China’s stand is an insurance guarantee against inflation for the rest of the world, economist Dmitry Tratas says. "China helps both the U.S. and European economies to maintain inflation at a sufficiently low level. It is no secret that the financial regulators of the USA and the eurozone have saturated financial markets with money in recent years. According to the existent theory, this should be accompanied by an inflation outbreak, which is non- existent so far, among other things, because of China’s export of cheap goods." Analysts say that China’s GDP growth is expected to range from 7 to 7.5 per cent in the coming years, and then it will start falling. However, experts say that it is necessary to take into consideration the fact that China’s statistics is not transparent and that it provides only figures allowed by the Chinese leadership. A change of government will occur in China in March next year. Xi Jinping will become China’s President. Experts believe that the spring session of the All- Chinese Assembly of People’s Representatives will unveil the economic plan for the future. Source: Voice of Russia
