The Central Bank of China has warned that China is to a certain extent under pressure even now and so recession still looms over the country. Li-Gang Liu, the chief Economist in China has warned that a just one wrong turn on the part of the government would suffice to take China to economic stagnation. Janet Yellen, the chair of the Federal Reserve and the Deputy Finance Minister of Russia have both expressed concern about the Chinese economy. Also, should the discouraging situation in the Chinese economy persist, the global economy is bound to bear the brunt, which fear has been expressed on many occasions in the past.
The ‘People’s bank of China’, the Central bank of the country, recently released its annual report which contains estimation and analysis of the coming times apart from information about the events of the year 2015. The report also states that the Chinese economy is even now under stress and that could lead to a slowdown. The central bank of China assured however, that it would do all it took, to maintain the country’s economic growth rate.
The annual report talks about measures for economic reform and of control over excessive industrial production. The US and European countries had expressed strong disapproval of the excess steel production in China and its import. The reference to control over excess production is considered significant on this background.
The report makes a mention of the possibility of the Chinese share market opening access to foreign companies. Over the last few months, big foreign firms were looking to withdraw from China, this step could help to hold them back and also to expand the Yuan, so it is claimed.
Although the Central bank of China indicates overcoming of the economic recession, doubts have been expressed both at the local and the international level. Li-gang Liu, a senior economist of the ‘Citigroup’ has warned that it would take just one wrong step to push China’s economy to a standstill. He advised that reconstruction of debts and privatisation of state-owned projects needed to be implemented urgently.
The Chinese economy was bogged down by the tremendous pressure of debts and that presented a challenge and has been talked about in local and international reports. But China does not seem to be taking any measures to correct the situation which triggers concern. Adding to the pressure were factors like the excess production and foreign exchange draining out. In this situation if decisions about the selling down of state ownership and concrete measures for debt control were not taken, the Chinese economy could face stagnation, Li-Gang Liu feared.
American and Russian economic experts have voiced concern over these events unfolding on the Chinese economic scene. Janet Yellen, the chair of the Federal Reserve has warned that the Chinese economy would have to face big challenges in the process of striking equilibrium and the global economy too was not going to be spared the brunt of it. The Russian Deputy Finance Minister Maxim Oreshkin expressed fear that recession did indeed loom over the Chinese economy.