http://www.reuters.com/article/2014/04/02/us-china-economy-tax-idUSBREA3114L20140402
China finally pulled the initiative in order to improve their economy, fluctuating with instability. First the government has reduced taxes for small firms on Wednesday (4/2). Moreover they are announcing accelerating the progress of railroad construction. Since the railroad is a great system for transportation and to dispatch supplies, a mammoth country such as China having the entire region connected increases productivity and reduces cost of production.
During last semester, there was an economics conference and there was a comment from one of the professionals that the growth rate of China in 2013 was lower than anticipated, thus a disappointment. However China would probably boost the output more in 2014. Their goal is to reach 7.5% of economic growth this year.
The Railway corporation, in order to proceed to the construction plan, sold bonds worth $32.2 billion. This movement might actually make Chinese economy ameliorate, not in the short run, but in the long run.
China finally pulled the initiative in order to improve their economy, fluctuating with instability. First the government has reduced taxes for small firms on Wednesday (4/2). Moreover they are announcing accelerating the progress of railroad construction. Since the railroad is a great system for transportation and to dispatch supplies, a mammoth country such as China having the entire region connected increases productivity and reduces cost of production.
During last semester, there was an economics conference and there was a comment from one of the professionals that the growth rate of China in 2013 was lower than anticipated, thus a disappointment. However China would probably boost the output more in 2014. Their goal is to reach 7.5% of economic growth this year.
The Railway corporation, in order to proceed to the construction plan, sold bonds worth $32.2 billion. This movement might actually make Chinese economy ameliorate, not in the short run, but in the long run.
While it is good for China to increase investment, there has also been concerns about corruption in their country. While railroad projects and other initiatives have been funded before, there has been a lot of controversy of various administrators using these funds for their own salaries and not for the projects planned. While investment in these type of projects can boost GDP, their effects may be minimal if the money is mostly used to pay someone else's salary.
ReplyDeleteIt will be interesting to see if China can be sustainable in this increase in their economy. As said "Increased construction of railway lines will foster investment, the biggest driver of China's economy, and which is rising at its slowest rate in at least a decade as the country moves towards consumption-driven growth." I didn't know China's economy was so strong with the construction of railway lines, I think if they do increase this growth, they will be able to grow in their economy.
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