China's Dilemma

Two big problems: overcapacity and leverage. The dilemma is how to reduce overcapacity and supply overhangs while avoiding a financial crisis?
Zhou Jintao believes that China's economic transition must face two major problems, the first one is the current economy is still suffering from high leverage problems, balance sheet repair process is a painful process; the second is the early accumulation capacity overcapacity remains an important factor in China's economic inelastic.

He pointed out that from the perspective of risk factors, China in 2016 is twofold risk. The first risk is that the weight of global economic crisis ahead of the arrival, which occurred in the United States and the world are more serious recession, which is the first important risk that the cycle - Risk (8 10 years) level; the second is that although the risk weight there is no risk in the world economy and the level of occurrence period, China is also trying to open new short period (40 months), but the open procedure will be of great twists and turns.

He also mentioned that since the opening of the new cycle on, each round of the inventory cycle up and running on departure are full of twists and turns since the 2008 financial crisis: the first round of the inventory cycle departure, brought a lot of inward investment growth in the economy has been from "overheating" to the "stagflation" of distress; upward in the second round of the inventory cycle, primarily due to the interest rate because the management and liquidation of the debt caused by the shadow banking sharply upward problems, while the Federal Reserve to raise interest rates for capital outflow of interference will be a variable plagued China to reform and steady growth. Looking to the future, in the third to start the process of inventory, due to the contradictions of the current economic system, should be aware of the financial risks of interference should be the most important factor in a third of the inventory cycle.
iFeng: 中国经济转型期必须面对两大问题 当前矛盾是什么?

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