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Finance for growth
Material posted: Publication date: 11-12-2017
How do they do it? How did China manage to grow so fast, with a speed above 6 to 7 percent a year? This country is like a Stayer, hour after hour running long distances. He has all the inside - the heart, muscles, breathing, thinking - configured at high speed.

Energy, metallurgy, transportation, infrastructure, research - all this and a thousand other systems of society must be able continuously, not pausing to expand. And for that to happen, they should be abundantly supplied with blood of the economy, money, Finance.

This means that the most important Chinese Finance is set up to stimulate super fast growth, the financial boost. No matter how sated money world of China's private tools in the center of his financial the fast and the furious - proadministration, with the major role of the Central Bank liquidity flood of all, and the system of banks with state participation.

In 2000, monetization (saturation money) in China amounted to 135 percent of GDP in 2010 - already 177% in 2014 - 190%, in 2016 - 208 percent of GDP.

At the end of 2017 will be the next record. As a consequence, parallel to the growing concentration of loans in the economy. They are more than twice exceed the size of GDP. For Russia, these "indicators" - several times less money wasteland.

In China, it is perfectly acceptable for business loan interest. He decades is reduced. The interest rate on commercial loans in 2000 is 5.85 percent, in 2010 - 5.81% in 2014 and 5.6 percent, in 2017 - 4,35%. What an enviable constancy! We have over the years multiple above.

Inflation in China, despite the super-fast growth of money supply and loans remain low. In 2000, the increase in consumer prices of 0.4 percent in 2010 and 3.3 percent in 2014 is 1.99 percent, in 2017 is expected to 1.77 percent.

Important in Chinese Finance - set up to stimulate super fast growth, financial the fast and the furious

We love the strong ruble. And China? This country for years was accused of currency manipulation, in that it artificially weakens its currency to stimulate growth, export and import of foreign capital. And cutechloe China's slowdown in the 2000s is associated with the fact that he had to start the revaluation of the yuan to the U.S. dollar. The yuan has increased from 8.3 yuan per dollar in the beginning of 2005 to 6.6 yuan per dollar today. What a mess, 20 percent! But not in two times, the ruble.

It is a striking sight - a comparison of the financial systems of the two great economies. Our quarter of a century is configured to be frozen, with the percentage to the heavens. It sways here and there almost every year. And constantly, it inhibits, slows down the economy. Another Chinese set to boost, to stimulate super growth. How? By enhanced monetization, easiest loan in the control of the percent, the exchange rate and low inflation.

If we add to this the low tax burden (below 30 percent of GDP), cheap state (the indicator "Final consumption of the state / GDP" is much lower than in Russia), more than 2-fold excess of imports foreign direct investment on export, you get a very high rate of savings. In 2000, the indicator "Investment / GDP" was in China, 34.3%, in 2010 - 47.9 per cent.

This year is expected to 44 percent (the so-called deceleration). In Russia, we are in the region of 20 percent. And, as a consequence, was in the area of the lowest growth rates.

In China now the financial crisis?

All this for a long time not "explode" because most of the financial risks "eaten up" at a fast pace. Part of the steam produced in the equity markets and derivatives, they are in China, many retail investors. And the core of the financial machine is not affected, while the state holds the commanding heights of Finance.

Will the crises ahead?

Yes, when Stayer - not always is it to be - will begin to normalize, and Finance in China moves towards more market economy. But when will it happen? God knows. Meanwhile, China in your fast and furious is another financial center in the world. In 2000, the money supply in China measured in dollars was 25 percent of the money the United States. In 2016 139 percent. And she increasingly breaks out. Already we see the expansion of the yuan as a global currency.

It's not about how to introduce the experience of China, and how to set our financial car on the growth of 6-7 percent.

No, it's not about how to "introduce" Chinese experience. Not about to have another pointless copy. Not about to deny the market as a blessing.

But do something we must find a solution to set the financial machine of Russia on growth of 6-7 percent? After all, we need to figure out how to do that without totally gosudarstva banks and not collecting all the money in Moscow. Or should not? And we don't need, and we are still years we hang out, waiting as a small, speculative financial system, which is still the years cut down stabiliziruemost and bring us growth and prosperity? The big question.

"How can we evaluate the terms that the Russian economy ends the year and what the prospects are visible in the near distance to the horizon?

Performance is worse than it was in the beginning of the year... on the other hand, clear advantages posed by rising world prices for raw materials (excluding seeds) and strong demand for export supplies to Russia.

And we are talking not only about oil but also about gas and mainly on the range of metals..."

Jacob Minkin


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