On July 20, 2012, Qiushi, a journal of the Central Committee of the Chinese Communist Party (CCP), reprinted an article from the China Jinggangshan Executive Leadership Academy Journal titled “Beware of the Real Economy Being Virtualized.” The real economy, which refers to the production and service sectors, is declining in China due to higher costs (of goods and labor), heavy taxes, overcapacity, limited investment, financing problems, and a lack of innovation.
However, the virtual economy is overly booming in China due to the huge returns from real estate, the stock market, the futures market, coal resources, antiques, art works, financial products, loan sharking, and the speculative markets for some agricultural products. Such a phenomenon poses a significant potential risk for sustainable economic development in China. In analyzing the main reasons behind the virtualization of the real economy, the article’s writer proposed some solutions for improvement.
Source: Qiushi, July 20, 2012