Prejudice against Chinese economy is risky
- By Zhong Sheng
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E-mail People's Daily, February 5, 2016
However, many presumptuous forecasts about China's economy were not delivered via incorrect methodologies, but stem from either partial perspectives or market speculation. No matter what, they are all prejudiced against China, making them far from consistent with the real achievements and potential of the Chinese economy.
As Director of the Earth Institute at Columbia University, Jeffery Sachs observed, in cliches adopted by billionaire investor George Soros and others, "one day China is the invincible new economic power; the next it can do nothing right".
Clearly, some of these predictions of "collapse of China" are reached without fact-checking. A few were even motivated by personal interests. That is also how Soros short sold the Southeast Asian markets.
Going through economic transformation, China does face its own challenges. It is also tackling them in its own way. For some Westerners, pointing out these problems in an objective manner is a way to prevent risks, while the exaggeration by others will only create risks.
Such acts are not only harmful to China, but the world at large, especially in this age of the 'global village' where no country can survive alone.
Goldman Sachs recently proposed a hypothesis, saying that if China's economic growth was 1 percent down, it would drag down the U.S. economy by 0.1 percent, directly or indirectly. With overreaction in the market, the figure could expand to 0.47 percent.
Economic analysis should always be conducted in a responsible manner, even if it is just a "chat" at an international event. False information could easily stir up market fluctuations.
Partial judgment also creates risks. If instant signals from the financial market one day affected the real economy, many countries would suffer from it. The public needs to stay alert to this.
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