World Bank: Chinese growth will fall to 1990 levels
Beijing (AsiaNews/Agencies) - In 2009, economic growth in China will be "only" 7.5%, the lowest level since 1990 and about two points below the worst previous predictions. Louis Kuijs, a World Bank expert in Beijing and a respected author, today warns that with the global financial crisis, it will probably be "worse," with even greater effects on the Chinese economy, especially because of its heavy dependence on exports.
The drop in exports is causing the shutdown of thousands of factories in China, and the loss of millions of jobs, especially among migrants. The government is afraid that unemployment and economic difficulties could lead to more social protests, and for weeks Meng Jianzhu, the country's public safety minister, has been urging local authorities to be "sober minded" in handling protesters, and to listen to their complaints instead of unleashing the police on them. Yin Weimin, minister of human resources and social security, insisted on November 20 that "the first priority is to maintain current employment levels."
Experts observe that Beijing, like other countries, is confronting the crisis by stimulating domestic consumption, but without intervening in the structural problems of its economy. The government will invest 4 trillion yuan for infrastructure and social services, but the World Bank warns of the danger that the infrastructure spending could increase the widespread corruption, and calls instead for investment in health and education, and assistance for low-income families. In order to avoid waste and corruption, Beijing has prohibited the spending of these funds "on public buildings," and will not permit them to be given to industries that consume large amounts of energy, produce large amounts of pollution, or already produce excessive amounts of products for the domestic market.
Yesterday, in Guangzhou, hundreds of taxi drivers who have been striking for days clashed with the police, after one of them was beaten by three men claiming to be city officials. In response, more than 2,000 taxi drivers have marched on city hall, calling for justice.
In a chain reaction, taxi drivers went on strike yesterday in Zhouxi, in Shaanxi, with the same economic requests as in other cities: lower taxes, lower fuel prices, more controls on unauthorized taxis. It is the seventh city in which taxi drivers have gone on strike, and the local governments are confronting the problem by negotiating small concessions, but no one is trying to reorganize the sector.