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People's Daily Online>>Opinion

No end in sight for economic doldrums

By Luo Lan (People's Daily Overseas Edition)

15:48, November 24, 2011

Edited and translated by People's Daily Online

The U.S. and European sovereign and debt crises continue to worsen, turbulence persists in global financial markets, inflation remains high in emerging economies, and unemployment rates in developed countries keep rising. Due to this series of difficult economic problems, the entire world is concerned with one single question: Will the world economy continue its downward plunge?

Crisis caused by unsustainable debt-based economic mode

Experts all believe that the global economy is experiencing a historic transition and will soon enter a very long period of low growth. The transition started from the previous international financial crisis.

Li Yang, deputy director of the Chinese Academy of Social Sciences, said that the global financial crisis starting in March of 2007 fully reflected the severe long-term abnormalities existing in various aspects of many developed economies, including the economic development mode, economic structure, financial structure, and revenue and expenditure structure.

The root cause of the crisis lies in the economic system of the developed countries. The development of their economies depends excessively on consumption. Their incomes cannot meet their expenses, and therefore, they not only lack savings but also carry tremendous debt. The crisis is a general crisis caused by the unsustainable debt-based capitalist economic mode.

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