I believe that the government will act on all of these conditions that have led to high savings by making credit more widely available, introducing a health insurance system and relaxing some of the down-payment requirements.
Premier Wen Jiabao (溫家寶) made clear in his recent remarks to the National People’s Congress that he would do what it takes to stimulate demand to ensure strong growth in China. I have little doubt about his willingness and ability to do so.
Martin Feldstein, a professor of economics at Harvard, was formerly chairman of US president Ronald Reagan’s Council of Economic Advisers and president of the National Bureau for Economic Research.
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