Chinese leaders concern over state of economy

At last, Chinese leaders came forward to accept the truth as they express their concerns about economy slow down and stock market crash. This is in total reversal to what they usually are- ggressive, optimistic and always confident about the strength of the world's second largest economy.

China President Xi Jinping called the economy slowdown as 'The New Normal.' Leaders of other nations also were worried about the Chinese economy slowdown and its impact on the global economy.

Chinese government is known for its incredible confidence regardless of any adverse condition in the economy. Surprising everyone, Chinese leaders expressed their deep concern about the current state of economy at a G-20 meeting recently held in Ankara.

While expressing their concerns about economy slowdown and other factors that impact global economy, G-20 leaders said that these were contributing to the uncertainty across the world.

South Korean Finance Minister Choi Kyunggwan said: "Uncertainty is growing over the world economy because of possible interest-rate hikes in the US and market instability in China. Viable alternatives, not rhetoric, should be presented.

Japan finance minister Taro Aso stated what China's central bank governor Zhou Xiaochuan repeatedly said about stock market downfall.

Xiaochuan earlier said that Chinese stock market bubble had burst.

According to Goldman Sachs estimates, Chinese government-backed banks, funds and brokerage firms infused $240bn into the domestic stock market since June. Some media reports also said that foreign investors still don't understand Chinese growth model.

At this juncture, China's central bank accepting that stock market's bubble has burst is itself a turning out point of changing perception of Chinese government.

Japan's Nikkei news service reported that while speaking to some delegates, Chinese Finance Minister Lou Jiwei said the China has to face tough time for next 10 years. Out of this, first five years are likely to be painful for the economy.

These statements don't support the seven percent GDP growth rate for 2015. When China GDP is expected to grow at seven percent, there's nothing much to worry. Though it's a slowdown from high growth rate point of view, but it's still growing at a rate higher than other major economies in the world.
G-20 leaders expressed their concern on slowdown in some economies and called for a tightening of policies.

The G-20 nations hold the view that relying on low interest rates may not be sufficient to boost the economy growth. Some advanced countries need to raise interest rates as well, opine G-20 leaders.

Chinese government has decided to shift economy focus from foreign investment-oriented to domestic consumption-based. During this transition, economy growth rate is bound to slowdown. Chinese government and policy makers knew this.

Until June, Chinese stock markets rose significantly 150 percent. Now, the latest statement of stock market bubble has burst from central bank governor Zhou is further raising many eye brows as what lies between the lines.

Market observers feel that the objective of such statement aims at bringing fresh cash inflow into corporate sector and financial markets. Chinese government's focus now is on how to get fresh funds into market and encourage people to invest in Shanghai and Shenzhen-listed companies.