[Epoch Times October 16, 2021](Epoch Times reporter Zhang Ting comprehensive report) The former chief economist of the International Monetary Fund (IMF) said on Friday (October 15) that the CCP is suppressing technology, extracurricular tutoring and In a wide range of economic fields such as real estate, “big mistakes” may be made.
In an interview with CNBC’s “Squawk Box Asia” program on Friday, Raghuram Rajan, the former chief economist of the IMF, said that he was very concerned about the suppression in China, because to some extent , They are currently attacking the foundation that drives China’s economic growth.
Rajan said that Beijing had to abandon the previous growth model and adopt a new one. But the question is, “Did they try to do it too fast, and in the process, leave less things to support growth.”
Rajan, who served as the IMF’s chief economist from 2003 to 2006, said that China has always relied on cheap labor and cheap financing to develop its economy, and changing this growth model will create “a lot of” uncertainty.
Rajan is currently Professor of Finance at The University of Chicago Booth School of Business. He said that the biggest area where China is seeking reform is the real estate market.
In recent months, the Chinese Communist Party has taken a number of measures to curb soaring real estate prices, including tightening financing for debt-laden real estate developers. As a result, Chinese real estate developer Evergrande has struggled to repay huge debts. Rajan said that more developers may face similar troubles.
He pointed out that if real estate prices fall due to government measures, local governments may lose revenue due to reduced land sales, and local governments are an important source of funds for local enterprises.
“So essentially, you are dealing with many things at the same time. When you do this, you risk making big mistakes,” Rajan said.
The economic challenges facing China have caused major banks to lower their forecasts for China’s economic growth in 2021.
Rajan warned that rising inflation is a major challenge facing the global economy.
Rajan, who served as the governor of the Reserve Bank of India from September 2013 to September 2016, said that inflationary pressures did not look as short-lived as central bank officials thought.
Major central banks such as the Federal Reserve and the European Central Bank say that the surge in inflation is temporary and will eventually subside. But Rajan said there are signs that the price increase may last longer than expected.
He explained that supply constraints-a factor that accelerates inflation-have spread to industries and countries. He added that rising energy prices have created power restrictions, which have caused “greater damage” to the global supply chain that is already struggling with major bottlenecks.
Since the beginning of this year, the Chinese Communist Party’s regulatory agencies have expanded the scope of suppression to include industries such as Alibaba, Didi, extracurricular tutoring, and video games. The Voice of America quoted Dexter Tiff Roberts, a senior researcher at the Asian Security Initiative of the Atlantic Council think tank, as saying that the new regulatory suppression has harmed the growth and profitability of technology companies and affected the interests of domestic and foreign investors.
Roberts, author of “The Myth of Chinese Capitalism: Workers, Factories, and the Future of the World,” said that China has restarted vigorously supporting state-owned enterprises and injected financial resources into industries that are considered core technologies such as semiconductors, chips, and batteries. However, this approach may outweigh the gains. What is currently being hit is China’s most dynamic, fastest-growing industry, and provides a large number of employment opportunities, which will cause irreversible damage to the Chinese economy.
Editor in charge: Li Yuan#
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