Opinion | Talk about stability in China is empty, if Beijing can’t deliver on reform
- Cary Huang says Beijing’s proposal to stabilise trade and markets only betrays its lack of confidence in the economic outlook. To ensure stability, it should restore trust by committing to market reform and political restructuring
For China in 2019, “stability” is the catchword, as well as the government’s main policy goal. And the key to achieving this goal is confidence.
However, Beijing’s recent proposal to ensure six “stabilities” not only reflects its anxiety about instability of the world’s second-largest economy, but also shows its lack of confidence in the economic outlook.
Actually, the growth rate of the Chinese economy has been steadily slowing over the past decade. Such a gradual slowdown is normal, even healthy, as the world’s largest developing country transitions from an export-oriented, manufacturing economy to one led by services and private consumption.
In such circumstances, confidence is critical for the creation of stability in employment, financial markets, foreign trade, investment, foreign investment and market expectations. However, China’s tricky economic transition has been complicated by unprecedented external and internal challenges, and business confidence might well have plunged to its lowest level.