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Torbjörn Petersson: China is betting on short-term economic strategy to the world joy

China's economy looks to have stabilized and it is received as a blessing from the almost all – from the chinese leadership in Beijing, which needs positive ne

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Torbjörn Petersson: China is betting on short-term economic strategy to the world joy

China's economy looks to have stabilized and it is received as a blessing from the almost all – from the chinese leadership in Beijing, which needs positive news when the trade agreement shall be concluded with the united states, to foreign ministers, international fund managers and, ultimately, small investors all over the world.

Relief – for China's economy, the world's second-largest, looks more stable out again. Which, in turn, be taken as a sign that the slowdown in the world economy seems to have stalled a bit.

”A stable and healthy basis for economic development in the years”, was a comment from China's central statistics office.

But something innovative is not the case in 2019.

that was created after the financial crisis of 2008: gigantic loans to infrastructure projects, easing on the financial markets, reduced reserve requirements on banks and deregulation in the real estate industry. This time also tax breaks for small businesses.

2018 was declared to the year when China would do away with the excessive debt and financial risks. Unprofitable state giants would be declared bankrupt and the huge overcapacity as a priority be rectified. But in August abandoned the planned line and now it is full blow forward with the stimulus and lättlånade money to lift the country out of a slump.

Something else do not dare to China.

then the equivalent of 4,000 billion were pumped out in the community, and in retrospect thanked the world outside China to have been a locomotive at a time when the world economy stood and stomped.

After a dismal end to last year now points to some statistics on the ljusningar: factories that increase production and more in the world who want to buy chinese goods. A greater willingness in China to consume.

and the stimulus which in return will lift the figures to provide an immediate increase in confidence in the chinese economy.

And the response has not been forthcoming. The world has responded with appreciation. In a positive sinnat stock market be China's apparent rapture received with open arms.

Both domestic and international experts have however warned of the consequences. As China's economy has grown and matured, it has gradually become more costly for the country to borrow itself out of the crises. What is gained in the short term, they argue, strikes back against China when it is clear that the investments do not return.

Read also: China plans to send out young people in rural areas.

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