LAUSR

The growing economies of Asia, and particularly China, are now entering a new economic terrain and a new era of normal business cycles and economic growth. For the first time in more than 30 years of economic growth, China is currently facing a downgrade in its credit status, and the double-digit economic growth of earlier times is declining. It needs to be noted that China, as the second largest global economy, has arrived on the global economic stage. It became a significant source of global manufacturing and became the largest trader and a significant buyer of the globally traded commodities. However, the current high level of debt of state-owned enterprises as well as local, regional governments ought to be addressed if China’s earlier economic growth is to stay the course. The impact of such level of debt is likely to affect the internal Chinese market and will have an impact on China’s trading partners, as well as other countries receiving direct foreign investment and foreign aid. China’s earlier demand for globally traded commodities is slowing down from oil to other commodities. However, bolstered by an estimated $3 trillion of foreign exchange reserves, the Chinese economy is estimated to grow at slightly over 6% for 2017. The emphasis on economic growth is a central concern for the party’s leading economic planners. It is also a new mantra for the Chinese populace. A popular parody depicts a highly watched TV program whose main character is Li Dakang, who has a song titled, “Defend the GDP.” His followers created such a musical tribute to such a vision called the “GDP Song.” The convergence of popular sentiments brilliantly depicted in such a TV series that is highly watched by the Chinese populace fits well with the communist party’s earlier emphasis on further economic growth. However, the television series also addresses issues of corruption, loan sharking, bankruptcies, and significant economic losses and hardships of factory workers. The lip service emphasizing environmental concerns are at play; however, they are no more than peripheral issues of concern. Another communist party concern and, particularly, President Xi Jinping is the reduction of poverty and the desire to create what he labeled as a “moderately prosperous society” by the forthcoming 100th anniversary of the communist party in 2021. The central government has introduced a national program to reduce poverty in rural and urban communities, with a focus on individuals. The available metrics indicate the number of urban poor has declined significantly; however, real poverty has not been remedied. The government is now developing a poverty household registry to help the rural poor rise above the subsistence level, “Dibao,” to guarantee that all poor individuals could qualify to receive financial support from the state. The success of such a program depends on reducing corruption and misappropriation of funds from local and regional government functionaries. Studies by the World Bank and the Organisation for Economic Co-operation & Development (OECD) suggest that streamlining operational bottlenecks of the Dibao program and working to increase efficiencies could help in reducing poverty by 2021. To reiterate, the socioeconomic challenges facing China are significant. And it ought to be noted that the Chinese have at their disposal significant financial reserves as they have emerged as a major provider of funds to help and streamline their own economy locally and continue to provide and loan funds to other emerging economies and to JOURNAL OF ASIA-PACIFIC BUSINESS 2017, VOL. 18, NO. 3, 151–152 https://doi.org/10.1080/10599231.2017.1346406