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Pessimistic views on Chinese economy sensational, misleading

http://news.xinhuanet.com/english2010/indepth/2010-05/09/c_13284246.htm

Pessimistic views on Chinese economy sensational, misleading

by Ming Jinwei

BEIJING, May 9 (Xinhua) -- A few Western economists and investors claimed recently that the Chinese economy could "collapse" due to what many say are overblown fears of a real estate bubble.

These views are really untenable given the fact that the Chinese economy was the first of the world's major economies to bounce back from the lowest point of the global financial crisis and has maintained a good growth momentum since the beginning of this year.

No one would deny that real estate prices in China have risen too fast during the past few years, especially in some major cities, posing a major threat to the country's macroeconomic stability.

The government has announced tough measures in the past few weeks to rein in speculative property buying in the housing market, including discouraging banks from granting loans to speculators and increasing the minimum down payments for homebuyers.

Putting the development of the real estate market back onto a healthy and sustainable track is no easy job. But any claim that the problem could lead to a total collapse of the Chinese economy is nothing but sensational and misleading.

The Chinese economy proved to be rather resilient in the financial crisis. It grew 8.7 percent in 2009, the fastest pace registered in any major economies in the world.

By contrast, industrialized economies including the United States, the euro zone and Japan contracted 3.2 percent as a whole, while developing and emerging economies grew 2.4 percent combined.

In addition, the International Monetary Fund and other international organizations have all expressed confidence in the Chinese economy.