Survey: Wealth gap, reliance on stimulus threaten China's economy

11:26, August 13, 2010      

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The latest survey issued by CA Australia, one of the world's largest accounting bodies, shows nearly half of the respondents believe the wealth gap will be the biggest challenge facing China's economy in the future, China News Service reported on Thursday.

Meanwhile, around 70 percent of those surveyed think overdependence on the government's stimulus policies is also among the biggest challenges China's economy will face in the future.

The survey also shows nearly 70 percent of those surveyed are confident or very confident about China's economic development prospects in the coming year and about 65 percent of them believe China's GDP in 2010 is expected to increase by 7 percent to 10 percent. Some respondents think the energy industry could have the highest growth potential, while others think the banking, financial service and auto industries are the most promising.

Only a very small number of respondents believe the double-dip recession that may occur in North America or Europe will have a tremendous impact on the Chinese economy, according to the survey. Analysts noted that it shows China's current economy is not vulnerable to the external economy.

When asked what polices can be most effective in stimulating economic growth, nearly half of the respondents said the government should expand domestic consumption, while some of them said it should crack down on real estate speculation and curb inflation.

When asked how to promote economic integration between China and the world, more than 60 percent said China should continue to implement market liberalization and increase mergers and acquisitions by Chinese companies in Western markets.

In addition, in terms of China's ongoing financial sector reform, more than 23 percent of the respondents support China's improvement in risk-management processes of financial institutions. And over 20 percent of them believe strengthening government's supervision of financial institutions will effectively reduce the further global recession and is conductive to the stable and sound development of the economy.

By Liang Jun, People's Daily Online


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