China Preparing for A Global Economic Slowdown

0
Share
Housing Bubble & Abandoned Projects In China

China is preparing for social unrest in the event of a global slowdown as a result of the European financial crisis.

Their communist government relies on rapid growth to maintain their image and their control. If that becomes damaged, the population will not look kindly so they are looking to censorship to keep the masses subdued.

CNBC reported on the concerns China has about social unrest in the event of a further global slowdown –

…Zhou Yongkang, a member of the politburo, told provincial officials that they needed to find better methods of “social management” – a euphemism which can include everything from better internet censorship and strategic policing of violent unrest, to a better social safety net.

“It is an urgent task for us to think how to establish a social management system with Chinese characteristics to suit our socialist market economy,” he told a seminar on “social management innovation”.

“Especially when facing the negative effects of the market economy, we still have not formed a complete mechanism for social management,” he said. Mr Zhou also urged officials to limit spending on wasteful “vanity” projects that trigger public anger…cnbc

China has many problems without this variable. For one, they are experiencing a housing bubble. Reuters reported today that –

The swing in fortune — residents and property agents say prices have dropped by up to a third — is a severe example of what is happening in cities across China, including Shanghai and Beijing.

After a housing bubble that doubled values in 35 cities between 2004 and 2009, prices are now falling nationwide. The central bank said on Friday property prices had reached a turning point while banks are worried a price slide of 20 percent could trigger panic selling.

Share