China’s largest annual political event, the National People’s Congress, recently came to an end. During the session, which lasted for 12 days, Beijing promised that a major overhaul of the world’s second-largest economy would spur new growth, while also minimizing hardship on retirees and workers caught in the transition. Nevertheless, many analysts downgraded their outlook for the Chinese economy, with some commentators even dismissing Beijing’s optimism as “disconnected from reality”.
A top story on the front page of the WSJ Asia edition by Wall Street Journal’s Beijing Bureau Chief Charles Hutzler claims that prominent problems of debt and overcapacity in China have gotten worse, despite being identified years ago. The article, which was also carried by both the Europe and US print editions, cites a quarterly survey of 2,038 Chinese manufacturers and other industrial companies by Finance Professor Gan Jie, the Director of the Center for Finance and Economic Growth at CKGSB, which shows that business conditions in China worsened throughout 2015. In Prof Gan’s 2015 Q4 report, a large majority of firms cited a lack of demand and excess capacity as their biggest challenges in the last three months of the year.
Meanwhile, an article by leading Canadian newspaper The Globe and Mail, comments that China’s economic optimism is not realistic, because there is too much uncertainty as to who is steering the ship. The piece also quotes findings from Prof Gan’s Q4 large-scale survey:
“Only 18 percent of 2,038 firms called current operating conditions good and only 10 – just 0.5 percent – planned expansionary investment in the coming year.”
Elsewhere, China Daily, which had previewed the report prior to its release, covered Prof Gan’s Q4 survey with an entire article in which the key points of the Q4 survey are listed. Professor Gan Jie’s comments are also quoted in the China Daily article:
“Any quick recovery is unlikely, as problems are structural and fundamental. Long-term industrial policy is key to a rebound, including industry upgrading and technological innovation. Easing monetary policy will not help the 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. To read Prof Gan’s 2015 Q4 large-scale survey results and analysis in full, please click here.
Chinese Premier Paints Rosy Picture of Economy, The Wall Street Journal
China’s economic optimism derided as ‘disconnected from reality’, The Globe and Mail
Firms surveyed say sentiment, orders down in Q4 of 2015, China Daily
For further coverage of Prof Gan’s latest survey in Chinese, please see the following links:
煤炭开采、石油加工产能过剩最严重, China Youth Daily
长江商学院：融资不是产业发展的瓶颈, China Business News
长江商学院调查报告：超五成企业对经济前景保持谨慎乐观, China Daily
长江商学院报告：去年四季度产能过剩情况出现好转, National Business Daily