CKGSB Professor of Finance Gan Jie’s quarterly survey on China’s industrial economy is referenced in a prominent New York Times article, as China’s economic woes continue to dominate global headlines.
Following the Central Economic Work Conference last month, Chinese leaders appeared to be satisfied with how the economy was progressing, as the country continues to settle into the “new normal” era. However, just weeks later, that sense of stability has been shaken once again, with China’s stock market on the slide and the country’s currency rattling investors around the world.
A recent article by New York Times Hong Kong bureau chief Keith Bradsher claims that the current situation of the Chinese economy provides few reasons for optimism. The RMB continues to decline despite efforts to stem the tide, while the stock market is down nearly 50% from last summer’s peak. What’s worse, the lack of industrial expansion could inflict heavy losses on the Chinese economy for some time to come.
The article cites a quarterly survey of 2,000 Chinese manufacturers and other industrial companies by Professor Gan Jie, the Director of the Center for Finance and Economic Growth at CKGSB, which showed that almost none are currently investing in new equipment and factories. As Professor Gan writes in her latest report:
“Most firms surveyed expect operating conditions to see similar slowdown in the next quarter, with deflation now a reality. Fixed-asset investing is the biggest area of decline, with only 2% of firms making such investments, says the report. Industrial policy is key to a rebound, including industrial upgrade and technological innovation, and that monetary easing won’t help industrial economy”
Since launching in Q2 of 2014, Professor Gan’s quarterly survey has attracted a great deal of attention from both industry experts and media alike. A recent event in Shanghai last month saw a packed room listen to her thoughts and analysis, with reporters from The Economist, Bloomberg, Nikkei and many others in attendance.
Four years ago, former Chinese Prime Minister Wen Jiabao said that 2012 would be the most difficult year for the economy since reform and opening up started some three decades before. While some might be making similar predictions four years later, many in China – and indeed around the world – will hope that 2016 does not continue in the manner in which it has started.
To read the original article in the New York Times, please click here.