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Print[Ferro-alloys.com]Some economist claimed recently that saving economic model was more suitable for transitional China than investment model. On the whole, economic structure of China was quite different from that of western credit economy countries. For a country that had just stepped into industrial society from agriculture society like China, massive credit consumption was not practical. Credit consumption was based on stable income, without which credit consumption was unsustainable. Currently, China was experiencing economic structural adjustment and citizens’ income was not stable. Structural wage inform broke traditional income structure completely, but new stable income system was not set at the same time. If credit consumption was promoted on a large scale, financial risk would be increased as well as consumption risk.
Therefore, the government should continue to implement the saving economic model. Deposit rate should be elevated continuously and the gap between loan rate and deposit rate must be shrinked. So that more finance would go into industrial enterprises and production could be expanded. Then, more jobs would be increased, more wealth would be created and employees could get better income. Only in this way could benign economic development model be formed.
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