Economic reforms must overcome hurdles

Editor's Note: Some analysts argue that China should not allow its economic growth to slow below 6 percent and it should adopt a strong expansionary fiscal policy with the support of a loose monetary policy to ensure its economic growth does not fall further. 21st Century Business Herald comments:

Such a view holds that the Chinese government has about $17 trillion in net assets at its disposal and $2 trillion worth of overseas net assets, which, it is argued, can provide a cushion. This argument has been raised every time the government has been asked to increase fiscal spending over the past decade or so. However, the value of assets held by the government does not remain unchanged, and when a country needs to sell state assets to support fiscal spending, the value of these assets usually falls sharply due to massive currency depreciation.