Weibo inspectors should avoid excessive content control: expert

China’s social media platforms need to train their content inspectors more seriously to avoid overreaching their controls, a Chinese expert said after users accused Sina Weibo’s new content inspectors of abusing their assigned power to randomly delete posts.

“Hiring inspectors is a necessity for the platform to deal with the government’s call on management of Internet information. However, this approach and its incentives might be a breeding ground for post-deletion abusers, for example getting paid for deletions,” Wang Sixin, a media law professor at Communication University of China, told the Global Times.

The platform needs to take its training of inspectors more seriously and they need to weed out any who don’t qualify as soon as possible, he added.

Wang’s suggestion comes after one Weibo user claimed that her selfies, posts of pets, pictures of legs, even swimsuit photos were designated “pornography,” which led to a penalty on her account.

Meanwhile, many users complained that inspectors were deleting posts at will and some remarked sarcastically that the platform needed “inspectors” to supervise the new inspectors it announced to hire last month.

Wang added that platform employees and inspectors might also collude with each other to share rewards.

Sina Weibo replied on its account on Thursday that the offending inspector had been fired.

It added that it welcomes users to report to the company if they find that the inspector’s work is inappropriate.

Sina Weibo made the announcement that it would hire 1,000 inspectors from among its users, on September 27, to weed out harmful information on the platform, including pornography and other illegal contents to keep the Internet cleaner.

Those people qualified enough to become inspectors would be given 200 yuan ($30) a month and a membership card and those who reported the highest number of offending posts would be given iPhones and tablets as rewards.

The inspectors were supposed to be subject to an assessment, where they needed to report on no fewer than 200 harmful posts a month and, conversely, would be dismissed if they were found to be blackmailing users, making three or more false reports, or were hovering around the bottom in annual reports.

Source: Global Times

China’s first compulsory school course of TCM met with doubt from parents, teachers

The fall semester is somewhat different this year for Yang Jun, a science teacher in Hangzhou, Zhejiang Province.

On August 9, shortly before the start of the new semester, his school, the Xiaoshang Yipeng Third Elementary School, received a notice from the provincial department of education and the provincial administration of traditional Chinese medicine, informing them of a new mandatory training for a new course in the elementary curriculum.

“Traditional Chinese Medicine and Wellness (TCMW),” as it is called, suggesting that this new course be offered in grade 5, one class hour per week, to be taught by science teachers.

As a science teacher, Yang feels uncomfortable taking on such a task. He believes that science teachers are not a good fit for teaching TCM. Yang also pointed out that, though having a lot in common with science, TCM and science are simply not the same.

In fact, many TCM beliefs directly contradict proven scientific theories. “For instance,” Yang observed, “some TCM experts claim that humans may invigorate their organs by ingesting respective animals organs. ‘A kidney for a kidney,’ for example, which means eating an animal kidney nourishes one’s own. How ridiculous does that sound to the science teachers!”

Yang is not alone in feeling unsure about his newly assigned role as a TCM teacher. Shi Youhe, Director of Teaching and Researching at Lin’an Chenxi Elementary School, shares Yang’s concern. On August 24, a week before the new semester began, Shi attended training.

“I should at least have some basic TCM knowledge myself before I can motivate my students to learn. However, till this point, I have not even had complete faith in TCM myself. I believe that the first step is to make myself interested in this subject, but unfortunately, the training only lasted one day.”

Shi expressed his disappointment but said he would nonetheless faithfully perform the tasks.

Read, think, learn, practice

Shi shared an example of his frustration. There are nine chapters in the textbook TCMW, which is the equivalent of 36 class hours. Each class hour consists of four modules: “Read,” “Think,” “Learn” and “Practice.”

Every lesson begins with a well-known story from ancient China, followed by a learning point and then an extended practice session. For example, Lesson 1, “Shennong (an ancient Chinese chief known as Yandi) Discovering Curative Virtues of Plants,” showcases the process of Chinese ancestors discovering herbal medicine.

The story is followed by the introduction of the homologous nature of medicine and food. In the practice module, students are asked to “taste the following foods that have curative properties,” and “decide whether they taste the same as described in the traditional Chinese medical literature.”

Shi was at a loss upon reading this question. Admittedly, introducing TCM theories with stories should be appealing to children. However, without any reference books for the teachers to prepare for the class, their job is made difficult. “Does that mean I will have to buy some Chinese medicine to try for myself?” Shi wondered.

He also feels that the development stage of this course was too rushed. “The textbook is written in a hasty manner. I think they need to realize that a lot of TCM theories that the experts take for granted are difficult for us laymen.” said Shi.

Yang shares his view. He pointed out that the TCM course did not go through an experimental stage like science classes during the curriculum reform. “Having written the textbook doesn’t mean the course is ready to be taught in the classroom. There should be an experimental stage before it is offered to the public. They should have picked at least one school for a test run.”

The “curriculum reform” Yang referred to is the National Science Curriculum Reform for the Compulsory Elementary Education, which is currently occurring simultaneously with the promotion of the TCM course. The new science curriculum criterion will replace the 2001 version.

According to Liu Enshan, chair of the Revision Committee of Compulsory Education Elementary Science Curriculum Standards, the development of the new curriculum standards took over five years. The early stage involved status quo research, document analysis, International comparison, monographic study, design demonstration and preliminary exploration of teaching strategies.

After the completion of the first draft, several large-scale surveys were carried out targeting eastern and western regions of China, which were then followed by repeated revisions of the draft.

The TCM course does not appear to have any official standard. An official course standard specifies the nature and concept of a discipline, course objectives, course content, as well as implementation recommendations etc. As far as Yang is concerned, before a course is offered to the public there must be a standard, however TCM textbooks seem to be the only thing it offers.

Popular skepticism

Gao Yinming is a mother of a fifth grader. She keeps an open mind and is hopeful that her daughter will learn something new. But Gao knows a parent who is a doctor trained in Western medicine. He is one of those who are against introducing TCM in the classroom.

It is of vital importance to cultivate scientific literacy in our children, but traditional Chinese medicine, Tibetan medicine or Miao (one of the ethnic minorities in China) medicine hardly do anything to contribute to it, the doctor said.

In fact, for a long time, TCM’s scientific quality and value system have been subject to controversy. One parent from Shaoxing is openly opposing teaching children TCM at school. He is concerned that this course may cause a discrepancy between what is taught in class and what is learned at home.

This concern is shared by many other parents as well as science teachers, such as Yang, who wonders what to do when a TCM course contradicts science.

Parents like Gao who are more supportive on this matter also have their concerns. TCM teachers, they say, have only attended temporary training. Being amateurs themselves, are they really suitable to teach?

Moreover, TMC as an area of study is extensive and profound. Though the TCM course aims only to touch upon the basics, it can be misleading to children, as their comprehensive and interpretive abilities are not fully developed yet.

Thirdly, some TCM theories tend to be ambiguous or vague. While adults may form a correct understanding, children tend to take things literally. As someone suggested online, “why not offer children a first-aid course or sex education instead of TCMW?”

Fang Jianqiao, President of Zhejiang Chinese Medical University (ZCMU), believes that elementary school students are not old enough yet to take any of these courses, including and especially sex education. Fang explained that because children are naturally inquisitive, with easy access to information nowadays, introducing these concepts too early might encourage them to try it themselves..

The goal

On April 8, Zhejiang Province released the first series of elementary school TCM textbooks in the country. Xu Weiwei, director of Zhejiang administration of TCM, has been envisioning this day for over two years.

He believes that to popularize TCM, it is important to promote wider acceptance of TCM among the next generation. To accept something, Xu explains, the first step is to get to know it.

In 2016, Xu officially submitted a project proposal to the provincial department of education, along with a funding request to the department of finance. His proposal was met with enthusiasm.

Zhejiang department of finance sponsors this project with an annual fund of 5-6 million yuan.

Xu ascribed the successful approval of the project to the rich TCM culture in Zhejiang. The province had 94 State-owned TCM hospitals as of 2015, generating an annual number of TCM hospital visits that ranks first in the country.

In January 2016, the idea of introducing TCM to children at school was brought up and discussed at the National People’s Congress.

On February 26, the State Council released a national “Strategic Plan for the Development of Traditional Chinese Medicine (2016-2030). In October 2015, Tu Youyou, Chinese pharmaceutical chemist and educator, received the Nobel Prize in Physiology or Medicine for discovering artemisinin in qinghao (wormwood herb), proving the efficacy of TCM and boosting national enthusiasm to it. Xu believes that all those above have contributed to the birth of this project.

This project does not lack in supporters. Zhao Min, professor of Hubei University of Chinese Medicine, believes that TCM is an important part of Chinese culture, “teaching our youth TCM helps to boost their national confidence and cultural pride.”

In response to parents’ concerns on the obscurity of TCM and the feasibility of the project, Xu explained, “this course does not aim to teach methods of treatment, but rather a way of life. It aims to promote TCM philosophy, to show our children that man is an integral part of nature.”

To address some of the teachers’ concerns about their competence to teach this course, Xu said local TCM practitioners will be sent for the training of teachers.

Source: Global Times

Family of deceased Chinese-American Marine rebukes official autopsy report

Family members of the deceased Chinese-American Marine Miriam Elizabeth Liu on Oct. 7 rebuked the official report, which attributed Liu’s death to suicide. The bereaved said the report was not convincing.

The 19-year-old was found dead at a military base in Yuma, Arizona, on Sept. 24. According to the autopsy report released by local authorities independent of the military, Liu’s death was not caused by external factors, rape, or drugs.

However, the report did not give any explanation as to why the enlisted woman committed suicide.

According to U.S. media outlet World Journal, Liu’s funeral was held on Oct. 7, and was attended by more than 300 Chinese-Americans.

Two hours were arranged for the last visitation, but the coffin remained closed during the whole process since the military said Liu’s remains were not in good condition, said Liu’s father Liu Zhiqiang.

Liu Zhiqiang told the World Journal that both Liu’s family and friends doubted the official report, saying the tough girl would have never committed suicide.

Liu’s family invited an independent forensic investigator on Oct.6 for another autopsy. Currently no result has been issued, and the family is still waiting for further information.

A source revealed that Liu had planned a trip to Disney Land with her mother on Sept. 22, only 2 days before she passed away. “She would have never said these if she had planned a suicide,” the source added.

Now Liu’s mother is still in grief, and the family will consider filing a lawsuit against the military to seek justice after the funeral, said Liu’s aunt.

Entrepreneurial activity among Chinese fresh college graduates rises to 3%

Entrepreneurial activity among Chinese fresh college graduates rose to 3.0% in 2017, approximately twice the figure a year ago, said a recent report on employment of Chinese college students jointly issued by Mycos Research and the Chinese Academy of Social Sciences.

China saw 7.95 million college graduates this year, and more than 200,000 of them have chosen to start their own business.

Some people believe that this is the best era for college entrepreneurs, and many people have already succeeded.

Chinese bicycle-sharing service provider Ofo is a good example. Initiated by a young man fresh out of college, the company raised 3.1 billion RMB ($450 million) from investors in March.

According to Professor Yao Yuqun from the School of Labor & Human Resources at Renmin University, entrepreneurship has been incorporated into mandatory college courses. “It’s a prerequisite to improve the rate of entrepreneurial activities,” he added.

The Chinese government has also rolled out a series of policies to encourage entrepreneurship, such as an entrepreneur fund, commercial rent concessions, and tax reductions.

However, the report showed that only 5% of college entrepreneurs succeed, even in provinces with favorable business environment, such as Zhejiang. Among the college students graduating after 2013 who started their own business, only 46.2% are still running their business, the report said.

Yao attributed the low success rate to three major reasons: insufficient capital, weak management ability, and lack of social resources.

Experts noted that Chinese college entrepreneurs face a number of obstacles and challenges, such as an imperfect risk control and an insufficient entrepreneurs rights protection mechanism. They believe that improvements of institutional mechanisms must be made in order to find effective solutions to these problems.

Egyptian sisters dedicated to bridging Arab-Chinese culture gap

Prompted by their brother Abdullah Kamal, a famous Egyptian journalist who foresaw the rise of China as a global power, twin sisters Rasha and Shiamaa Kamal decided to study Chinese in the 1990s to better understand the rising economic powerhouse.

Now, they have become the building blocks of a bridge connecting the cultures of China and the Arab world, working as established translators and lecturers in the Chinese language.

“Since my first year in al-Allsun Language College in 1996, my sister and I had a clear objective of promoting knowledge, transferring and introducing as much information as we can about China into the Arab world,” Rasha Kamal, a 38-year-old professor of Chinese language at the Ain Shams University, told Xinhua.

Since 2011, Rasha has translated and edited 36 books about China, with subjects including China’s great economic progress, the Belt and Road initiative, the life of Deng Xiaoping, the chief architect of China’s reform and opening up policies, and a series of books about the Xinjiang Uygur Autonomous Region in northwestern China.

“I’m very keen on cooperating with China’s Ministry of Culture to define Chinese history, culture and civilization from the Chinese original perspective, not from the West’s mistaken understanding,” said Rasha, the younger sister.

Shiamaa, chair of the Chinese Department of the Badr Private University in Cairo, told Xinhua that Egyptians are now more eager to become involved in activities that deepen their knowledge of China’s success.

Growing popularity

There are now 250 Egyptian students in the Chinese Department in al-Allsun, a sharp rise from 40 in 1995. Meanwhile, many private universities across Egypt have opened new departments recently to teach the Chinese language and literature.

The Kamal sisters said they have taken part in most of the cultural events in Arab countries related to China since their graduation in 2000.

“It’s our role as academic instructors and translators to erase the false perception about a country that had been conservative and closed for decades,” said Shiamaa, who recently attended a seminar in the United Arab Emirates on the Belt and Road initiative.

The initiative aims to build a trade and infrastructure network that connects Asia with Europe, Africa and the Middle East along the ancient trade routes, to seek common development and prosperity.

“China’s hands are now extended to the third-world countries based on mutual interests and cooperation rather than confrontation, with a focus on creating more opportunities,,” Rasha said.

After achieving an economic leap that has greatly impacted global politics, China has started to pay more attention to promoting its own culture.

China, which used to be a closed nation, has now become a society that is more open to other cultures, Rasha noted.

The Kamal sisters see the Belt and Road initiative as “a golden opportunity for enhancing cultural ties.” Rasha praised the initiative not only because it focuses on promoting partnership and cooperation with participants, which is totally different from the Western models, but also because it shows China’s determination to convince its partners to support it.

She noted that China, in promoting the Belt and Road initiative, has established research centers, held seminars and conferences, and translated related information into several languages.

Official statistics showed that Egyptian youths like to work in Chinese projects that are now spreading through the entire region, and to learn the Chinese language in order to work as tour guides.

Tourism boost

Nearly 200,000 Chinese tourists visited Egypt in 2016, making China the fourth largest source of tourists for the country, in a major boost to an industry that had been suffering a slowdown due to political turmoil and terror attacks since 2011.

Accordingly, the two sisters believe Egypt and China should enhance coordination, not only between their culture ministries, but also between the two countries’ publishing and translation industries.

Besides attending several book fairs and seminars on China in the Middle East in 2017, Rasha has also traveled to many Arab and European countries to promote her books about China from the Chinese angle, in cooperation with Chinese writers, novelists and translators.

Rasha is now working on translating more books about China into Arabic.

“Our mission is not only translation, but to introduce Chinese culture to the Arab people,” Rasha said.

By Global Times Source: Xinhua

Chinese naval ship drives away suspected pirate vessels for foreign freighters

On Sept. 27, the supply ship Qinghaihu of the 27th Chinese naval escort taskforce drove away nine suspected pirate vessels for a U.K. container ship and a Maltese freighter.

At 9:32 a.m., the two ships sailed to the left of Qinghaihu, and the suspected pirate vessels approached the U.K. ship 10 minutes later.

The Chinese naval ship immediately initiated first-class anti-piracy operations and used sirens to warn the nine vessels.

The Maltese freighter soon approached the right side of Qinghaihu.

Later, the suspected vessels stopped approaching the U.K. ship. In order to prevent them from attacking the Maltese freighter, the Chinese naval ship forced them starboard.

At around 10:13 am, the U.K. and Maltese vessels left the region. Qinghaihu lowered its alert level and continued its patrol mission.

China to officially implement national anthem law starting October 1

China’s national anthem law will be officially implemented starting October 1, Beijing Youth Daily reported on Saturday.

Yu Hai, member of the National Committee of the Chinese People’s Political Consultative Conference and a famous cantor, has been making efforts for 10 years to legalize the proper use of the national anthem.

“The national anthem, national flag, and national emblem are all symbols of China’s national image,” Yu told Beijing Youth Daily, adding that the law is also a reflection of the improved legal system in China.

To protect the national anthem is the original intention of his proposal of the legislation, Yu noted. In addition, China’s national anthem enjoys the same legal status as the national flag and national emblem.

According to Yu, both domestic and overseas orchestras have misplayed the national anthem.

“I’m very disappointed about that since I believe there should be no mistakes in playing national anthems. That is a minimum requirement,” Yu noted.

The legislation also received broad support from Chinese literary and art circles, which shows that the national anthem law is a common aspiration of the people.

Starting this October, anybody who modifies the lyrics or the playing or singing of the national anthem in a malicious or disrespectful way will be investigated.

China excels in meteorological science

China has become one of the best countries in the world in terms of meteorological science and technology after decades of efforts, said an article published on People’s Daily Overseas Edition on Sept. 30.

The article hailed China’s major breakthroughs in this area, especially in the past five years, which were achieved with help from the aerospace industry.

WeChat, China’s most popular mobile social media mobile network changed its splash screen from the famous photo of the Earth called Blue Marble taken in 1972 by NASA to a satellite picture of the planet showing China taken by the Fengyun-4A satellite, the first of China’s second-generation geostationary orbiting weather satellites.

WeChat said in a statement that while the African continent is the origin of human civilization, it is also important to show the network’s millions of users the significance of Chinese civilization.

It is also a tribute to China’s developments in meteorological science and technology.

The Fengyun-4A satellite was launched on December 11, 2016. Compared with its predecessor, the Fengyun-2, a first-generation geostationary orbiting satellite, it has made major breakthroughs in many fields and achieved a number of international firsts.

By adopting 3-axis stabilization technology, the satellite is more efficient under using flexible area scanning.

According to Lu Feng, deputy chief-engineer of the ground application system of Fengyun-4A, the satellite, with high-performance instruments, is able to observe lightning 500 times in one second, which will greatly improve the country’s nowcasting capability.

China has launched eight meteorological satellites, becoming one of the few countries to simultaneously operate polar and geostationary orbiting weather satellites.

Three polar orbiting satellites observe the whole globe on the morning and afternoon of each day, and five geostationary orbiting satellites observe the medium- and low-altitude area centered on China that covers a third of the globe, Lu introduced.

After 40 years of development, China’s Fengyun series has become one of the best civil remote-sensing satellites in the world, with improved international influence and brand power.

Fengyun meteorological satellites are now serving more than 90 countries, with ground stations in 18 Asia-Pacific countries.

Lu said that Fengyun geostationary meteorological satellites are important for disaster prevention and relief in the Belt and Road countries. Since the satellites broadly cover these countries, they can serve as an excellent reference for weather forecasts, he added.

After months of operation, the Fengyun-4A satellite has withstood tests and begun showing its capability. It has successfully predicted the formation and development of the meteorological conditions in multiple weather phenomena in China this year, including the severe dust in northern China in May and the intense rainfall in the South in July.

The satellite has been incorporated into the World Meteorological Organization Integrated Global Observing System, and will make greater contribution to regional disaster prevention and risk reduction.

Ratings fail to portray full picture of China’s economy

Last week, Standard & Poor’s rating agency lowered China’s sovereign credit rating by one notch to A+ from AA- and revised its outlook to stable from negative. This means S&P’s rating is in line with assessments from Moody’s and Fitch, which cut their sovereign credit ratings for China in May and 2013, respectively.

A sovereign credit rating was originally a very professional financial assessment, offering cross-border investment and financing guidelines for other institutions. But in the Internet era, the impact of such a rating has been amplified by online media. In particular, for a country like China that attracts global attention, the sovereign credit rating is considered by some as an indicator of whether China’s economic performance will be “good” or “bad.”

First, the big three credit rating agencies actually use US market conditions as a template to develop rating parameters. Since China differs a lot from the US in terms of economic and market conditions, applying these parameters to China may result in lower accuracy. It is generally believed that S&P’s downgrade of China’s rating and its stable outlook for the country’s long-term economic trend are unlikely to have a significant impact on the market. This limited impact is actually a reflection of the agency’s discounted accuracy.

Nevertheless, when it comes to public opinion, Western rating agencies’ reductions of China’s sovereign credit ratings are often used as a tactic to attract public attention.

Generally speaking, Western investment institutions have been inaccurate in forecasting the performance of the Chinese economy over the years, which shows that the Western ratings of China are wrong. For a long time, the Western mainstream media has given a pessimistic picture of China’s economy, and that bias has had a profound impact on the Western perception of China.

While ratings agencies are not ordinary opinion makers, they are part of Western culture, which can’t throw off Western perceptions and logic.

China’s economy including finance is not exactly the same as the West. Therefore, although Western rating agencies and other professional observers provide seemingly objective third-party views about China, it is a superficial objectivity and does not touch on the most profound “rules” about China. Drawing an analogy, a Western ruler can measure whether China is “fat” or “slim,” but it cannot accurately evaluate the overall health based on the result.

According to some Western predictions, the Chinese economy should have “collapsed” several times, and we should have borne the brunt of an economic hard landing and experienced a “color revolution,” but such predictions failed again and again.

A sovereign credit rating is mainly aimed at measuring the debt default risk of a country. China has been unprecedentedly stringent in the control and governance of its debt in recent years, and its ability to adjust leverage is unmatched in the world. Since the beginning of this year, China’s foreign exchange reserves have increased, with the yuan strengthening again, pointing to the improved trend in financial risk control.

With various bubbles squeezed out of the Chinese economy in recent years, the country’s economic development is bound to take off again. Chinese society is full of expectations that new growth potential will be released after the 19th National Congress of the Communist Party of China, which is scheduled to be held on October 18 in Beijing.

In exchanges with the Western elite, Chinese people may feel an initial novelty in hearing their perceptions of China. But slowly, they see the limitations of Western understanding of China and the stubbornness in it.

The best way to understand China is from an integrated Chinese-Western perspective, rather than one or the other.

Whether China agrees or not, the S&P rating is out there, representing the Western understanding of China. Professionals will still refer to it, but the Chinese economy has not fit into the framework set by the West in recent years. Objectively speaking, the Chinese economy is special in a way that Western observers cannot perceive.

Source: Global Times

Genuine recovery in China depends on stronger demand

According to statistics, our real GDP growth rate posted a significant decline in 2012, which actually seems to have been a turning point.

Interestingly, despite the continued slowdown in GDP growth, China’s employment remains strong and the unemployment rate has remained stable. Since 2013, about 13 million new urban jobs were created annually, which I think is a miracle.

Had there not been a strong employment promotion policy introduced by the government in 2013, there would be no way to explain how this miracle happened.

How did the government manage to do this in the face of a sharp decline in economic growth? Data on trends in the manufacturing and services sectors from the National Bureau of Statistics may offer some insight.

Over the past few years, employment growth in the services industry has been far ahead of the manufacturing sector. Six years ago, this situation was just the reverse. Especially after 2012, owing to the government’s employment promotion policy, the employment growth of the services industry began to accelerate.

How can this be done by policy? With economic growth continuing to decline, the manufacturing sector keeps shedding staff. To solve such a large employment problem within several years, the only choices are for the laid-off workers to stay home or enter the low-end services industry. Considering that most modern services are derived from manufacturing, consumer services are more likely to be the focus of employment promotion policies.

We do not have microeconomic data, but if we put the financial, banking, insurance, education, communications and other modern services industries aside, the other industries can be regarded as low-end services. Viewed in this way, we see that after 2012, the ability of the low-end services industry to create new jobs has expanded at incredible speed.

Unemployment hasn’t caused big problems despite a continued downward spiral in the economy, largely thanks to the employment promotion policies. However, it’s not the case that a demand for large scale employment has been created as the services sector needs to achieve an improvement in productivity. Growth in the services sector’s productivity at large barely rose.

Over the years, due to economic and investment downturns, China’s manufacturing industry has released more labor. But with employment in the services sector continuing to expand, why did labor productivity growth also experience a significant decline?

If the government did not adopt a strong employment promotion policy since 2013, I doubt this would have taken place, or at least not to the same degree. A strong employment promotion policy apparently eased employment pressure in the short term, but as to the medium and long term, a strong employment promotion policy will not relieve downward economic pressure.

In any economy, a recovery in the short term mainly depends on demand improvement. If demand improves and the economy recovers, this will create the conditions for structural reform. We should realize that demand hasn’t improved greatly for the past few years. At the same time, we are promoting supply-side structural adjustment.

This approach might not improve the macroeconomic situation very much, because the debt rate and leverage ratio cannot be significantly reduced, and nominal GDP growth will also be reduced.

The easing of downward pressure on the economy is shown in the improvement of demand and the rise of overall price levels. But we have seen that the producer price index (PPI) declined for four and one half years, and it wasn’t until one year ago that it started to rise slowly. However, a rebound in the reading doesn’t indicate a substantial improvement in domestic demand, but it may signify improved demand for exports. When this signal was amplified, enterprises began to increase inventory.

But, why didn’t the consumer price index change over the past year, while the PPI rose so fast? The reason is that only prices of upstream industries rose very fast, reflecting capacity reduction in the upstream industries caused by supply-side structural reform. Because final demand didn’t significantly improve, cutting excess capacity gave the illusion of an economic recovery and re-inflation on the market.

This illusion has also sparked recent heated discussion. Now it seems that 7 percent GDP growth is possible, and will not quickly lead to inflation. In recent years, our consumer-price inflation target has been 3 percent, which we did not reach, indicating that demand has not substantially improved. The nominal GDP growth rate in these past few years has been lower than the real GDP growth rate, and weak demand has caused problems for enterprises. That situation doesn’t help us to deal with our debt, reduce leverage and promote structural reform.

Source: Global Times