Chinese Tolerant Growth- Frustrating Crude Prices

Its not been long that China had its historic and eventful election and the fruit was the government with a supposition of making different policies and focusing the prioritized development objectives in accordance to the public interest. Recently, the president of China made an orthodox statement suggesting relations between the resistant economic growth, environmental degradation and the impactful role the private sector can play in execution of the plans and policies made for the development. In present days, environment has been gaining a lot of importance globally as it has been identified that the earth has a limited carrying capacity and that the environmental maintenance is important for the livelihood in the long run. Thus, the president urged that the government would not degrade environment just for the short-term growth. Tax reforms are also coming up as the implementable strategy. President and his team has planned to decrease the government’s role in the economy, open up state-dominated industries to private investment and then restructure the household registration system which will massively contribute to the urbanization of the place.

Experts believe that its high time the reforms start working because the growth target are getting out of chase. Moreover, labor markets are facing more of the economic problems compared to other economic dimensions and the local governments are burdened with too much of debt. They also believe that there is a dire need of accelerating the economy but that cannot be achieved by policies like quantitative easing. Plans are being made to strengthen the market forces and decrease the government interference in the economy. Deng Xiaoping is the father of economic reforms of the country and he opened up government for the foreign investments and decreased the government control over the economy. The chief economist at Bank of America Corp. in Hong Kong suggests that the reforms like hukou (household registration methods) and the land reform is difficult to achieve easily. The president focused more on the environmental protection following the public un-satisfaction that the present industrialization is increasing pollution and their health hazards are increasing. Land disputes have increased social unrest.

Crude has dropped almost a three percent in two weeks owing to the policy of environmental protection in China. Meanwhile, it is yet to see what would be the effect of the policy in China, in the long run?