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Institute for Workplace Studies-----------------Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor--------------------Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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World Bank

 

CHINA ECONOMIC UPDATE: Special Topic: An Update of China's Fiscal and Tax Reforms--OCTOBER 2014 [29 October 2014]

http://www.worldbank.org/en/country/china/publication/china-economic-update-october-2014

or

http://www.worldbank.org/content/dam/Worldbank/document/EAP/China/CEU_Oct29_en.pdf

[full-text, 31 pages]

 

[Highlights]

·         Growth in China continued to slow in 2014, reflecting policy steps to put economic growth on a more sustainable footing.

·         Policy efforts to tighten credit growth, reduce excess capacity, internalize the cost of industrial pollution, and harden budget constraints of local governments accelerated in 2014.

·         Targeted support measures and the recovery of external demand have limited the growth slowdown, but pressures from the weak housing market remain a significant drag on domestic economic activity.

·         The real estate sector, an important engine of growth of recent years, continues to adjust to policies to tighten credit and reduce supply mismatches.

·         The growth forecast for 2014 has been revised downward to 7.4 percent, still meeting the government’s indicative growth target of about 7.5 percent.

·         For 2015–16 average growth is expected to ease to slightly above 7 percent as policy efforts to place the economy on a more sustainable growth path are likely to intensify.

·         The government’s indicative growth number for 2015 will signal the priority that the authorities put on growth and reforms.

·         The current emphasis on meeting short-term growth targets will make it more challenging to implement the policies necessary to shift growth to a more sustainable medium-term path.

·         In an uncertain global economic environment, China’s sizable policy buffers could be reserved to maintain overall macroeconomic stability in case of unexpected domestic or external economic shocks.

·         China’s key medium-term policy challenge remains implementing reforms that support China’s next transformation toward more efficient, equitable, and sustainable growth.

·         A comprehensive reform plan was introduced to put China’s public finances on a more stable footing.

·         Revisions in the budget law provide far greater transparency and accountability for local government debt management.

·         Reform plans were announced to make gradual adjustments to the hukou system to integrate migrants into urban life.

·         Implementing reforms can accelerate China’s economic growth potential, but it will not reverse a moderation of growth over the next decade.

·         Without policy action, the slowdown in China’s potential growth in the medium term could be more severe

 

Press Release 29 October 2014

China’s Growth Continues to Adjust to a New Normal

http://www.worldbank.org/en/news/press-release/2014/10/29/chinas-growth-continues-to-adjust-to-a-new-normal

 

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