Lending spree
In 2009, the year after the the global recession started, China's broad money supply grew at a whopping rate of 27.68 percent compared to a year earlier, and it continued to grow at a rate of 19.5 percent from January to November 2010.
The government finally decided to come to terms with fighting inflation in the second half of the year and put the brakes on the lending spree. In the fourth quarter of 2010, the People's Bank of China, the central bank, announced a 25-basis-point interest rate hike and raised the banking reserve requirement ratio three times to a record level of 18.5 percent.
At the annual Central Economic Work Conference held in Beijing from December 10 to 12, a gathering of the country's top policymakers put controlling consumer prices at the top of the economic policy agenda for the next year.
The loser
Inflation has put the average working-class citizen in a financial squeeze because salaries have already been kept relatively low over the past year, while the cash in their hands has bought them less and less.
The pinch on the pocketbooks of consumers is deemed by many to be unfair because they are in no way to blame for the problem, yet are powerless to do anything while they stand by and watch inflation devour their hard-earned money.
The real interest rate has been in the negative territory for 10 months now, which means that deposits in the banks are actually devaluating. Therefore, the average citizen does not want to plant cash there.
For the up-and-coming middle class, buying an apartment in big cities was once considered an achievable dream to meet a personal desire for a place they can call their own, and hence feel some sort of economic security.
But the social security network is largely incomplete in the country.
"Ordinary residents could only afford to buy an apartment if they work hard for 8.76 years while abstaining from eating and drinking," the Chinese Academy of Social Sciences said in a report in November.
Desperate, delirious or deluded, a large amount of retail investors turned to the volatile stock market to gamble with their financial future. In retrospect, the stock market had a roller-coaster ride this year, and individual investors largely fell prey to the institutional investors armed with bank loans, hot money from overseas and possibly insider information.
It is the same old story: The rich get richer and the poor the poorer.
1 2 3
In 2009, the year after the the global recession started, China's broad money supply grew at a whopping rate of 27.68 percent compared to a year earlier, and it continued to grow at a rate of 19.5 percent from January to November 2010.
The government finally decided to come to terms with fighting inflation in the second half of the year and put the brakes on the lending spree. In the fourth quarter of 2010, the People's Bank of China, the central bank, announced a 25-basis-point interest rate hike and raised the banking reserve requirement ratio three times to a record level of 18.5 percent.
At the annual Central Economic Work Conference held in Beijing from December 10 to 12, a gathering of the country's top policymakers put controlling consumer prices at the top of the economic policy agenda for the next year.
The loser
Inflation has put the average working-class citizen in a financial squeeze because salaries have already been kept relatively low over the past year, while the cash in their hands has bought them less and less.
The pinch on the pocketbooks of consumers is deemed by many to be unfair because they are in no way to blame for the problem, yet are powerless to do anything while they stand by and watch inflation devour their hard-earned money.
The real interest rate has been in the negative territory for 10 months now, which means that deposits in the banks are actually devaluating. Therefore, the average citizen does not want to plant cash there.
For the up-and-coming middle class, buying an apartment in big cities was once considered an achievable dream to meet a personal desire for a place they can call their own, and hence feel some sort of economic security.
But the social security network is largely incomplete in the country.
"Ordinary residents could only afford to buy an apartment if they work hard for 8.76 years while abstaining from eating and drinking," the Chinese Academy of Social Sciences said in a report in November.
Desperate, delirious or deluded, a large amount of retail investors turned to the volatile stock market to gamble with their financial future. In retrospect, the stock market had a roller-coaster ride this year, and individual investors largely fell prey to the institutional investors armed with bank loans, hot money from overseas and possibly insider information.
It is the same old story: The rich get richer and the poor the poorer.
1 2 3
