Here's How China Is Creating Jobs, And Saving The World Economy

Read more: http://articles.businessinsider.com/2011-06-23/markets/29959039_1_wen-jiabao-chinese-growth-china#ixzz1dCyJ3S3m

This is rare: Chinese premier Wen Jiabao has published an op-ed in the FT called How China Plans To Reinforce The Global Recovery.

In it, he distills Chinese economic policy, and the message is: While the West teeters and slugs along, China is the locomotive of the world.

Here are they key points:

1. China loves stimulus. Via the constant establishment of domestic demand, Chinese growth sailed during the entire slowdown, and that continues today.

2. That stimulus represents a range of investments. [/b]China is spending $618 billion on various [b]infrastructure programs (roads, rail, etc.), as well investments into science and technology.

3. China is lowering its trade surplus. Since 2007, the country's trade surplus as a share of GDP has gone from 7.5% to 3.1%, as domestic demand creates benefits overseas.

4. China is expanding its social safety net. All Chinese now have free education. 90% of the population has access to medical co-ops. 60% of counties have old-age insurance schemes.

5. China's currency is getting more flexible, with the Renmimbi gaining 5.3% since June of last year.
Inflation is being whipped. Price caps and supply expansion means Wen is confident of inflation being beat this year.

Finally, Wen concludes with this message of China's big-time role in the world:

China is now at a new starting point in its drive for development. We have adopted the 12th five-year plan which calls for shifting the development model. We will continue to pursue economic structural adjustment, boost research and development, and education, save energy and resources, promote ecological and environmental conservation, and narrow the regional and urban-rural gap. China’s drive for industrialisation and urbanisation is gathering pace. Its economy is increasingly market-oriented and internationalised. We are fully capable of sustaining steady and fast economic growth.

China will continue to work with other countries with common responsibilities.

We should make concerted [b]efforts to strengthen the co-ordination of macroeconomic policies, fight protectionism, improve the international monetary system and tackle climate change and other challenges. [/b]We should welcome the fast development of emerging economies, respect different models of development, increase help to least developed countries to enhance their capacity for self-development, and promote strong, sustainable and balanced growth of the global economy.

http://finance.sina.com.cn/20090217/10345864499_3.shtml　

First, to achieve further market-oriented reforms, the liberation of productive forces. Only market-oriented reforms, to break the monopoly, full liberalization of market access and further reduce administrative examination and approval (remove red tape and bureaucracy), so that private enterprises and state-owned enterprises, foreign-funded enterprises can compete for freedom, equality, and possible release of the Chinese economic vitality, so that entrepreneurs are confident in the future. To stimulate investments, primarily investments in private enterprises should be stimulated, rather than the inefficient state-owned enterprises investment.

Second, the further implementation/reformation of the financial system, especially the exchange rate market-oriented reforms. If we implemented a few years ago the exchange rate reforms, the crisis may not be so serious. Conversely, if you do not change, it is difficult out of the woods. Exchange rate reform in 1997, when in fact ready to start, but the Asian financial crisis so that we become overly cautious, that the reserves in his hand on safety, not to move forward and dragged more than a decade. It now appears that excessive foreign exchange reserves and as harmful as too little foreign exchange reserves.

Third, to promote labor market reforms. Determine a policy of good or bad, noble purpose is not to see it is not noble, but to see the effect of this policy. We say that a policy is not good, that is, the effect of this policy and the opposite. Labor Contract Law is a typical example. The new labor contract law to protect the interests of workers, but the biggest damage is precisely ordinary workers and farmers ready to find work, because it greatly reduces the employment opportunities. Labor Contract Law is not just the cost of the damage on the economy, but also damage to the corporate culture. Now, more and more difficult to manage corporate people, and also into the past, "dry as looking to see is better than cause trouble." So, I suggest decisively to stop the implementation of new labor contract law to limit freedom of contract terms, so that more freedom of labor contracts.

Fourth, the transfer of national wealth to the people. Economics is the study of national wealth (wealth of nation), rather than the study of national wealth (wealth of state). Our country, there are a lot of wealth concentrated in the hands of the government, rather than national hands. I think you can use this crisis to promote the transfer of national wealth to the people/common wealth.

As Chinese, we do not have to be so pessimistic. China's economic potential is still far from release.

After the 1929 crisis, the United States replaced Britain as the world economic power, and perhaps this time the Great Depression, is China's opportunity. Prior to 1929, the British economic power, the pound is an international reserve currency, but Britain is debtor, the United States to lend to Britain because the British had to maintain his empire to borrow money from the United States. Today, the United States is the economic power, China is a rising power, China to lend to the United States. Maybe after the 1929 crisis in the world can change in the pattern of crisis again in 2009. Another 20 years, three years, even five years, China may overtake the U.S. as the world's largest economy.

Therefore, in this sense, the crisis for China may also be a good opportunity. The rise of all major powers are created by some chance.

And I remember my Economics teacher telling us in class that China and co. practice Communism which is a terrible form of economic system and that Capitalism is the best form and its being practiced by U.S and co.

Now capitalism is crumbling and they are running to the pseudo-capitalist enemy of China.

I guess there is no perfect system then.

they practice protected democracy.
people are not absolutely involved in governance.
aristocracy plus democracy

i enjoyed reading this. For an economy to be standard,stable and effective. Some factors must be apply, first- the country must united in one accord. In Nigeria,it's a different case altogether. Tribalism,boko haraming,Mend and other hidden distractions. There must be effective delivery,what do we have Nothing, our transportation system is one of worst sector.no good,railway,shipping system,aviation and co. Thirdly, accountability,the only resources we value on earth is our OIL which is the main problem we are facing today. The money we gain from it, is been shared by our greedy leaders in the name of 'excess crude'. From this little analysis, the big question is HOW CAN WE SURVIVE

The lesson to learn from the Chinese is that they make medium and long-term goals and they commit fully to them with all arms of government pulling in the same direction. They don't allow politics, intrigue and corruption to get in the way of their country's development.

In contrast, Nigeria doesn't make serious plans. All we do is adopt ridiculous clichès like "seven point agenda" or "vision 20/20" without making any concrete moves to achieve them. In Nigeria today, politics is king. Some people can't be crossed no matter how much damage it does to the nation.

Our weakling president said himself that "a cabal" (another clichè) is stealing most of the fuel subsidy money and endangering the country's future. And yet, what has he done to stop them? Nothing! He's too scared to touch any of the sacred cows even though their greed is slowly destroying Nigeria.

If this was China, the authorities would quickly arrest all those people, hold a 2 day trial, then kneel them down and put bullets in the backs of their necks. One for each cabal member. Problem solved!

I understand that in China if they have two options:

Option 1) Costs $500m will involve using a lot of foreign expertise and will employ 5000 people; OR

Option 2) Costs $600m will involve using a little foreign expertise but will employ 10,000 people.

The Chinese govt will go for Option 2 as it provides more employment and capital will stay in China as well as the multiplier effect of reduced unemployment.

The most important thing is the level of productivity involved in making d country a gr8t place. I definately give it to them

The post only tells half of the story. The other half includes an economy that manufactures for the rest of the world. The only reason that they’re trying to create domestic demand is because they need someone to keep the consumption of manufactured goods going because of dwindling demands in Europe and America.

Nigeria does not manufacture anything, at least, at the international stage. The only stimulus that the government needs to engage in is in the manufacturing sector. If our manufacturing companies manufacture enough to have a trade surplus on average with the rest of the world, Europe better watch out!

kunlekunle:

they practice protected  democracy.
people are not absolutely involved in governance.
aristocracy plus democracy

are they not better for it?

.NET

The poster made a great mistake by comparing Nigeria with China's lessons of development in terms of job creations.
Why cant you pick little countries who are still categorized in world statistics as DEVELOPING COUNTRIES (DC)
                                              Ghana, southafrica,Libya,Egypt,Tunisia,
                    This countries above are still struggling to cope with job creations,but have what it takes to satisfy there citizen want ,if not 100% but at least 20 percent is available.CONSTANCE POWER SUPPLYS ,WATER, HOUSING AND GOOD ROADS
                        BUT I THINK WE ARE GETTING CLOSER TO THE POINT OF FREEDOM
                                                                      BY
                                                               BOB MARLEY.

while other countries are creating jobs, our insensitive government are busy employing means of more hardship like removal of fuel subsidy, austerity, undemocratic governace to the electorate. what a shame

At times I used 2 wonder if our govt are ignorant but now I know that they are not ignorant of what should be do but they don't want to do them. God should just save & deliver us from the reckless bad & wicked govt. AMEN. God help 9ja.

Jps1:

At times I used 2 wonder if our govt are ignorant but now I know that they are not ignorant of what should be do but they don't want to do them. God should just save & deliver us from the reckless bad & wicked govt. AMEN. God help 9ja.

God will NOT save nor deliver you from them. Instead, he expects you to use your head at the next elections and vote in the right candidates. I too was gullible and believed that the incumbent was capable. Now, I know better!

Can't wait for 2015.

.NET

.NET:

God will NOT save nor deliver you from them. Instead, he expects you to use your head at the next elections and vote in the right candidates. I too was gullible and believed that the incumbent was capable. Now, I know better!

Can't wait for 2015.

.NET

na who u go vote na?

well d reason they are creating jobs is because theu operate on SOCIALIST ECONOMY. while nigeria use both CAPITALIST AND SOCIALIST ECONOMY. and u nigerians are CORRUPT!!! so get use to it. your country will not improve.

please how do i post a news in the front page of this website? i need it a.s.a.p

VoodooDoll:

I understand that in China if they have two options:

Option 1) Costs $500m will involve using a lot of foreign expertise and will employ 5000 people; OR

Option 2) Costs $600m will involve using a little foreign expertise but will employ 10,000 people.

The Chinese govt will go for Option 2 as it provides more employment and capital will stay in China as well as the multiplier effect of reduced unemployment.

Nigerian politicians/gov officials would rather inflate project cost by 500%, award the ontract to foreigners and lodge their 'kick backs' in banks abroad

Lol u all are naive, do u know what the Chinese think of the average black man, taking about corruption they are just as bad If not worse,  The difference is the level of productivity, every Chinese has a business mostly as a manufacturer not importer. my girlfriends mom has two factories which employs over 4000. china is rich, but it people are ever so poor, Been to all the major cities sharp contrast from normal cities.

Really?

My people.
Seeing is believing.
This people don goooooo faaaaaaaaaaaaaaaaaaaaaaaaar!!!!
They are no longer short o! Dem don get Ikebe sef!
Dem dey speak English well-well! Kai!!!!!

I weep for Africa and NIGERIA!!!

except china is not trillions of dollars in debt. so china can actually afford it's stimulus packages.

How would China survive, if they had such good economic package, but bribery and corruption was eroding the foundation of their plan?

Dunno, would probably be like NG

Not in the area of jobs alone, why can't the government look at how things are being run over there and copy the same thing or modify it to suite nigerians.

I don't believe that we have lessons to learn from China. Everything that has been listed up there are all encapsulated in the farcical '7 Points Agenda', 'Vision 2020', and other misleading government blueprints for development. The obvious difference is that our own government have failed to implement the plans.
Nigeria has never been short of developmental ideas, no. What we lack are leaders who are willing to work for the common good.

Quote 4m Johnpual2k2

i enjoyed reading this. For an economy to be standard,stable and effective. Some factors must be apply, first- the country must united in one accord. In Nigeria,it's a different case altogether. Tribalism,boko haraming,Mend and other hidden distractions. There must be effective delivery,what do we have Nothing, our transportation system is one of worst sector.no good,railway,shipping system,aviation and co. Thirdly, accountability,the only resources we value on earth is our OIL which is the main problem we are facing today. The money we gain from it, is been shared by our greedy leaders in the name of 'excess crude'. From this little analysis, the big question is HOW CAN WE SURVIVE

Ask urself how the nation / world Nigeria came into existence, the country Nigeria doesn't exist outside oil & gas, believe it or not, that's the bitter truth & the reason the factors mentioned that she require to progress doesn't exist too.

It's only smone like me who understands the chemistry behind Chinese success that can bring the turn around needed in Nigeria.

Quote 4m usbcable

And I remember my Economics teacher telling us in class that China and co. practice Communism which is a terrible form of economic system and that Capitalism is the best form and its being practiced by U.S and co.

Now capitalism is crumbling and they are running to the pseudo-capitalist enemy of China.

I guess there is no perfect system then.


It's all about making what u've work 4 u. I can create school of thought that doesn't yet exist on earth & make it work. I've got a lot running in my mind but you need a chance (or take / create chances which in Nigerian case wld mean, ) to make it happen.

Quote 4m Jps1

At times I used 2 wonder if our govt are ignorant but now I know that they are not ignorant of what should be do but they don't want to do them. God should just save & deliver us from the reckless bad & wicked govt. AMEN. God help 9ja

That's more reason why Nigeria need to be liberated uh. God will only help u when u've started helping urslf. Asking God to solve Nigerian problem 4 us without us trying & asking 4 God's assistance is also compounding the issue. Don't u think with the no of churches in Nigeria, it shld be richest & best country on earth? Ask urslf, what's going on?

Nigeria's problem is human not Godly, cld be solved by a human the way Nigerians created them, though we could involve God if we want miracle (note: Gods miracle doesn't happen always) but that means we've to wait 4 sun-shine.

Quote 4m Evil brain

If this was China, the authorities would quickly arrest all those people, hold a 2 day trial, then kneel them down and put bullets in the backs of their necks. One for each cabal member. Problem solved!

The above is the only solution that can liberate / change Nigeria for better, deceiving ourselves daily by calling God wldn't unless we're asking for miracle meaning we'll wait till sun-shine, by probably telling birds the things men do.