SOME BIG SIGNS WHICH ARE SHOWING THE SLOWING PACE OF CHINESE ECONOMY



In the last few years’ Chinese rapidly growing economy remains big threat for most of the giant economies of the world. In last decade china made great progress and its economy groom very rapidly leaving her competitors far behind. But it seems that this rapid growth of Chinese economy is going to slowdown. There start appearing some signs which are indicating the fact that the fast growing economy is now setting back and facing some internal problems. In this article some very prominent signs of slowing down the pace of Chinese economy are discussed
Here are the signs:

Cut in reserve requirement ratio (RRR)

After the first week of June central bank of china announce a big cut in reserve requirement ration (RRR) to make the liquid cash available for smooth running of the economic affairs. This is a big sign which is indicating that now Chinese economy is facing some problems internally and has to manage his problem by slowing down his economic growth rate. In my opinion there are two big reasons which led the central bank of china to take such step. One is ongoing economic recession and the second is extra-large expenses on the development of infrastructure in the country.

Effect of recent crisis on Chinese economy

The slowdown of sales in market is being observed world vide. It is due to the pullover trend of the customers in the world. The reason is that due to present crisis everyone has to face cut in his income and that is why he want to save money from unnecessary expenses. This makes the customer conscious in going the market for purchasing products. In short customer is reluctant in going to market and making expenses frequently. This trend pull the manufacturers to decrease their production which ultimately affecting the economy of the world. The same is the problem with the economy of china in these days. In other words due to low demand of products in the market the grower and manufacturer slowing their production processes which ultimately decreasing the pace of growth of economy.

Effect of large scale development of infrastructure in the country

In last three or four years Chinese government started big projects for the development of infrastructure in the country. Very large amount of funds are required for the completion of these projects which are shedding extra burden on the economy of the country. No doubt these projects will open the ways of new horizons in making more progress in future but at the present time these projects are hindering the pace of growth of Chinese economy and the results are started appearing in the form of various signals like cut in RRR.

Taking in view the above said factors investors are getting surprise and they are reluctant for making investment in the industries affiliated to the Chinese economy. They are observing the slowing down pace of economy and thinking what can happen with this economy in future. However in my opinion there is no need to be worry because the government of china has started taking measures to check the slowing down pace of their economic growth. Cut in (Reserve Requirement Rate) RRR is one such measure which will enable the industries and economy to work smoothly without any hindrance.

Moreover the decrease in interest rate is another big step which can increase the slowing down pace of economy. It is the basic rules of economics that decrease in interest rate make the entrepreneur easier to operate the industry freely. Moreover it also stimulates the consumer to go the market and buy the product. In other words it increases the scope of production and sales which generate the economic activity in the country and finally affects the growth rate of economy. I hope Chinese government will handle the potential economic crisis with batter management of resources and planning.

However under the present circumstances it is advisable to the investors to take care while investing their money in the ongoing projects. Especially in the trade of currency because currency trade is under continuous stress and yielding some drawbacks in the market. Under these circumstances there are companies which are offering their services to trade in commodities. It is batter to invest in commodities rather than in any other kind of trade. One such company is b binary and they claim that trade with [b binary] for quick profits and fast, easy withdrawals. Receive a 100% match bonus on your first deposit. So feel free to contact such companies to make your trade more profitable.  

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