Chinese Jittery Over "Asset Bubble" Warnings
Global leaders and bankers are in a process to seek firm signs at the Davos forum this week, of China's determination to control the money flow into its economy.
Optimists gainsay that China's high savings rate is a natural process, emphasising on households, who do save a lot, around 30% to 35% of income.
A year after China's Premier Wen Jiabao sternly lectured the United States and other western nations at the World Economic Forum for triggering the international financial turmoil, markets are now nervous over "asset bubble" warnings around his country.
Chinese officials have initially augured that the speech by Li, a senior member of the Communist Party's ruling politburo, will be entirely revolving around the financial crisis and reforms.
Although China has very meticulously shielded itself against the financial crisis, however, its property and stock markets and its soar away growth -- 10.7 percent in the fourth quarter -- has triggered inflation jitters which have already forced the Beijing government to reduce bank lending with an aim to deter a consumer splurge on cars and property.
Economists cite that China runs the risk of a sharp recessionary correction, which could hit recovery around the world, particularly the United States, its main trade partner.
"A crash landing is a worry but not a high probability at the moment", Nariman Behravesh, Chief Economist for IHS Global Insight, who will be speaking at Davos, said.
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