Экономические науки. Макроэкономика

Student Goncharova N.S.
Rostov state economic University (RINH), Russia

Current problems of economic development of China

 

Over the past few decades China's economy occupies one of the leading positions in the world. The unique business model in the country has shown tremendous growth and unprecedented development. And it was the USA discovered for Chinese production there market and gave the huge investment. But China's economy has also some problems which are becoming more urgent now. In this article the actual problems of the Chinese economy, such as wage increases and the rise in the labor force, the devaluation of the Yuan, the shadow banking, are shown.

One of the main reasons for the success of the Chinese economy was a cheap labor force consisted of low-skilled workers and low productivity. The productivity of any worker in China was many times lower than in the developed economies. And the payment of such work is appropriate - more than 10% of the population in China live below the poverty line earning less than a living wage.

However, in the conditions of stable economic growth China is gradually losing its main advantage - the cheap labor force. Over the past few years an active growth of wage was registered in China.

The reasons of these trends become China's aging population and the policy of one child in the family, which has led China to the increase of the number of old people.

The sharp decline in the influx of new workers from the Chinese villages to urban factories and construction sites means a subsequent inhibition of the PRC economic growth and reducing the competitiveness of the economy and hence the reduction of Chinese exports. In this regard the need in structural reforms in the economy is increasing. The essence of this need is to find new sources for Chinese’s further development.

This affects the rate of China's economy development which in 1995-2009 averaged 9,8% and that in 2011-2015 decreased to 7,2%. Many experts believe that in 2016-2020 years the pace of Chinese economy development will be reduced to 6,1%. [2]

As long as China labor force was cheap, many countries have placed their production in China. But now most companies gradually close or move it to the better place.

The growth of wage in connection with the reduction of working force is not the only problem that has shaken the economy of this country.

Last year in August the National Bank of China devalued the Yuan. The official exchange rate is lowered to its record, by the standards of Chinese economic policy, the value of – 1,9%. [3] This is a necessary measure for China. Thus Celestial answers to the global challenges are in strict accordance with the Taoist philosophy (which is identical to the loss). The small fall in Yuan rate has compensated the Chinese current loss in the world market.

In the first week of 2016 the National Bank of China lowered the rate of the Yuan against the dollar by 1.5%. This was the biggest change of the exchange rate in China since August 2015. Since 2008 the Yuan has remained at 6.8 per dollar and in September 2009 began to grow. In 2014 the peak was recorded - one dollar was worth 6 Yuan. [4]

We cannot mention another modern problem of PRC. This is the "shadow banking". In a narrow sense it is an illegal activity, in other words "laundering" of money, the withdrawal of money abroad, bypassing state control over cross-border capital flow and others. Such activities can fulfill both informal lenders and conventional banks. For "white" banks it is often off-balance or clandestine operations, which they usually hide from the National Bank of China and the Commission on banking regulation.

However, China, including the special regions of Hong Kong and Macauthe, has a growing number of shadow banks. More than 3,350 of these banks operate in 120 Chinese cities. They serve for 120-150 thousand people. Profits from the illegal turnover of money in these banks vary from 4% to 15%. Chinese underground banks have close ties with the state-owned banks and foreign financial institutions, and even directly subordinate to them. [5]

Nowadays the underground banks are mainly engaged in the illegal withdrawal of money from the country. According to the estimates given in the Hong Kong magazine in the period of 2000-2004 through Chinese underground banks there were the withdrawal from 450 to 800 billion Yuan (US $ 70-125 billion.); in the period 2007-2012 - 3 trillion Yuan (US $ 475 billion.); in 2013-2014 - 6 trillion Yuan (US $ 950 billion.). In 2015 during the stock market collaps in the period from July 24 to August 14 China sent more than 824 billion yuan abroad ($ 130 billion) and 70% of the capital was derived by shadow banks. [6]

The scale of Chinese legal "shadow banking" is significantly inferior to the US and the UK and is comparable with Japan. But in the rate of the growth of the "shadow banking" China surpassed the economically developed countries. According to estimates The Financial Times in the period 2008-2013 the volume of operations of the "shadow banking" in China rose about four times and reached 20 trillion Yuan. This is the equivalent to 3.2 trillion dollars and 40% of China's GDP.

The Chinese authorities have not paid enough attention to the activities of trusts and other organizations of the "shadow banking" for the reason that they have helped to increase the real estate market and to maintain high rates of economic growth in China.

Nowadays Chinese authorities see that trusts and other non-banking structures transformed from a factor of economical growth into the economic destabilization factor. They are attempting to limit the "shadow banking". However at the moment, China's success in this area is not great.

So the above problems facing China's economy saying that the economic growth of the Celestial is sharply slowing, the widening financial crisis of the world economy is not inevitable for the PRC and the way out of the current situation all the countries will have to find together.

 

Литература:

1.     Тенденции на рынке рабочей силы Китая: от количества — к качеству//SouthChinaService Group-2014 - http://www.scsgroup-consult.com/ru/articles/view/273 - сайт компании SCS Group

2.     Мануков C. Конец китайского чуда//Эксперт-2015- http://expert.ru/2015/05/5/konets-kitajskogo-chuda/ - сайт журнала Эксперт

3.     Лосев А. Слабости Поднебесной: почему девальвация юаня поможет рублю// РБК-2015-  http://www.rbc.ru/opinions/economics/12/08/2015/55cb57449a79478c6e1d43ac - сайт РБК

4.     Воронина Ю. Министерство финансов Китая не будет обесценивать юань//Российская Газета RG-2016- http://www.rg.ru/2016/02/25/ministerstvo-finansov-kitaia-ne-budet-obescenivat-iuan.html - сайт Российской Газеты RG

5.     Китайский премьер выделил три скрытые проблемы в стране//ИНОСМИ.РУ-2015- http://inosmi.ru/world/20151007/230672044.html- интернет портал ИНОСМИ.РУ

6.     Катасонов В. «Теневой банкинг» и «долговая ловушка» Китая//REGNUM-2015-http://regnum.ru/news/innovatio/2003426.html - сайт информационного агентства REGNUM