Nanfang Daily: Many people say that China should invest in the European debt crisis relief in Europe, you think this is a wise investment?
Nanfang Daily: the European Union in Brussels reached a consensus evaluation?
In addition, it is worth noting that, if China has gradually liberalized financial system, I think it will be a trend, it means that the Government will reduce the control of deposit interest rates, which will lead to rising interest rates on deposits, lending rates will also rise, and in many respects to the Chinese political. In order to maintain control of the national economy, the Government may be financial resources more highly concentrated in the body of the state-owned enterprises. Proposed to speed up economic reform sounds very technical, but implementation is difficult.
Bottelier: I think the current very limited space to ease monetary policy in China. The central bank has cut interest rates, because the central bank to cut interest rates, this will lead to more serious problem of shadow banking. Adjusted for inflation, China's real deposit interest rate is still negative interest rates, this time not be able to continue lowering interest rates the only way out is to implement a lower statutory reserve ratio. I have observed in China are beginning to do.
He believes that China's current monetary policy operational space is not large, shadow banking is still grim, China should increase its financial opening up and domestic economic reforms to rebalancing. He also believes that Europe's debt crisis has not yet solve the progress in real terms, the debt of investment in Europe is not a good choice.
Bottelier: I think this is a very big problem, and from 2009 to the present there has been. 2009 a massive bailout funds into the market, but many companies to shift the money to participate in the capital speculation. Once a company can be obtained from financial speculation, high-yield, they will lose interest in business management. This is a very terrible thing, this problem also exists in the United States. I also observed World Pipe network informed, from the beginning of 2009, the massive growth of China's shadow banking, mainly because China's domestic savings rate is very low. The shadow banking is not a new thing, China has always existed the shadow banking, but now become very large scale, this is a very dangerous thing.
Private capital is still rampant monetary policy easing is limited space
Nanfang Daily: the adjustment of economic structure world pie network information , you have any suggestions?
Bottelier: domestic economic transformation of China in the 12th Five Year Plan ", is now very urgent. I think that China should reduce its dependence on exports and investment, and enhance the stimulation of domestic consumer demand, including government consumption demand, and can increase government spending in health, education, social services, social security and other aspects. In addition, China should be more targeted to accelerate the reform of the domestic economic structure.
Bottelier: China is the world's second largest economy, and now China's GDP is about $ 6 trillion, while the U.S. economy a total of about $ 15 trillion. If China's GDP average growth of 8% rate, to create demand for the $ 500 billion per year for the global economy. Average annual growth of about 2% calculated in accordance with the U.S. GDP and about 300 billion U.S. dollars to the global demand. This shows that although the United States remains the largest economy, but China is the world's largest variable. The slowdown in China's economic growth will lead to a global impact. Is expected to China's GDP growth at around 9.2%, but it is undeniable is that China's economy must be balanced, so that the growth rate down to a more sustainable level, the long term, for 20 consecutive years to maintain the growth of more than 10% not sustainable.
Nanfang Daily: the current world economic situation is not good, China is undergoing economic restructuring, we are worried about whether China's economic "hard landing" next year, how do you think?
China's economic slowdown affecting the world the urgent need to expand domestic demand and open up the financial
Bottelier of the former World Bank chief representative in China. (Data)
Halter Financial Summit yesterday, the scene, the Nanfang Daily on the inside and outside the economic problems currently facing China to interview the well-known economist and former World Bank chief representative in China Bottelier.
Nanfang Daily: China in the new year can do any improvement?
Bottelier: I think, which is a very important point is to adjust China's financial system. Although China's trade openness is high, but has not been open financial system, including the exchange rate and interest rate markets and free capital out of. International capital out of China is very difficult. China's financial system and the world financial system is fragmented. Open will enable China's financial risk, but the next step is to obtain a balanced development, and indeed the need to reduce government control of financial markets, speed up the interest rate market. At the same time, I think to implement a flexible exchange rate policy, it is necessary to gradually achieve capital account liberalization.
Bottelier: wait until the European countries to find the time to solve this problem, this would be a good investment. But before that, if China wants to invest in large-scale capital, the risk is very high. But once European countries at the political level to find solutions to problems, and began to see some action, then this may be a worthwhile investment. Such as bank shares, now the European bank shares prices are low, and a major European stock purchases. At the same time to buy U.S. real estate is a good choice.
Bottelier: the agreement reached yesterday in Brussels, the European economy is an important step of an active role, but not enough to solve all the problems. Long-standing issues between the Northern and Southern Europe is the real problem in Europe, the productivity of the southern European countries is less than the Nordic countries. The country has its own currency, they will make up for the lack of productivity of the situation by devaluing the currency. But now using the same currency, fiscal austerity has become the only way. But it is very difficult, especially in democratic countries. I think that yesterday the Brussels agreement is very important, positive role, but does not really address the fundamental problem.
Nanfang Daily: Do you think that in 2012 China's monetary policy to the how?
Europe's debt problem is no solution if the high investment risk
Nanfang Daily: You just mentioned the shadow banking problems, many manufacturing enterprises in China engaged in the speculation of the capital markets are worried about the industrial hollowing issues.
2012 forthcoming, the world situation is still complex, some of the major economies slowdown in economic growth, some countries sovereign debt problems, turbulent international financial markets, emerging market countries, inflationary pressure is still larger. Uncertainty and risks of the world economic recovery, indicating that the 2012 global economy to turn the new one is not easy. Central Economic Work Conference held soon on how to deal with this difficult time the world's historic?