"Paying Crisis" Not to Haunt China

The following are excerpts of Professor Fan Gang's speech about financial crisis and Chinese economy in the "Asian Financial Crisis — 10th Anniversary Symposium" in Guangzhou on April 15.

* Why did the Asian countries that suffered from the Financial Crisis open up their economies then?

* It makes little sense to say Chinese people are not apt to spend money to buy things. Many of them, however, just don't have enough money for consumption, as their disposable real-income is not very high.

* The "paying crisis", which happened before and in the Asian Financial Crisis a decade ago, will probably not occur in China.

* The national disposable income makes a growingly small proportion in China's GDP while the corporate undistributed profits amount to an increasingly big share of GDP. This situation is not sound enough. Chinese administration is taking efforts to improve it. And the corporate undistributed profits can be transformed to be surplus saving.

* Formula: Saving - Investment = Surplus Saving = Foreign Trade Surplus

(By Ronald Li)

Source: www.lifeofguangzhou.com

Editor: Ronald Li