[War] PRC: "Growing Pains"

[Michael Downey]

Forgot to add the source http://news.bbc.co.uk/2/hi/business/4925920.stm

On 4/28/06, Michael Downey <michael.michaeldowney at gmail.com> wrote:
> "Growing Pains"
> President Xiao Wu
> People's Republic of China
> 28 April 2006
> -=-=-=-=-=-=-=-=-=-=-=-=-=-
>
> "Of all the problems our economy could face, too much growth is not
> something I expected," chuckled Wu as he sipped his tea. Premier
> Kwencho seemed to find the situation just as ironic. Finance Minister
> Quan Tesh furrowed his brow.
>
> "We want our trains to move quickly," said Tesh, putting the situation
> into perspective. "But if it moves to fast it will fly of the track."
>
> "I am aware of how economics work, Minister," said Wu in an assuring
> tone. Some politicians in China still had a very communist, and thus
> very flawed, view of economic systems. Wu, like the majority of
> Chinese 'communists', had long ago abandoned Marxism and embraced a
> capitalism.
>
> Wu was concerned that debt spending would soon increase among China's
> growing middle class, and production might outstrip both foreign
> demand and domestic consumption. The Western nations had learned the
> hard lessons of such a situation in the 1930's. A student of history,
> Wu was not about to let the same troubles befall China.
>
> "Though some in the State Council have been reluctant to do so, we
> must raise interest rates to cut down on lending and debt spending,"
> said Tesh. "I would also suggest a tax hike to take some steam out of
> the manufacturing sector. Perhaps a hundred billion US dollars. That
> is not very much, considering the breakneck pace of growth has raised
> the GDP to over eight trillion, but it would slow things down just
> enough that growth is not progressing dangerously."
>
> "A hundred billion dollars could also prove very useful for us right
> now," noted Kwencho. "We could eliminate the state deficit and still
> have..." he quickly did the math. "Sixty eight billion dollars left
> over."
>
> Wu considered all the things they could do with that kind of money. He
> certainly was not going to put all of it into the military, but the
> PLAN wanted new destroyers for their fleet. Not just second hand Red
> Navy ships purchased from the Russians, but newly constructed
> warships.
>
> Then there was the deployment of troops to Sudan, and the offer to
> deploy troops and donate equipment to Iraq. That would certainly cost
> a fair amount, though Wu did not believe the Americans would be upset
> about that kind of military spending.
>
> Then there was his agricultural initiatives, and the health care
> system could always use more financing. So many possibilities.
>
> "I will authorize raising interest rates by 2%," said Wu. "As well as
> the new tax. Pay of the deficit, record the rest as a budget surplus
> until we have had more time to decide what to do with it."
> ---
>
> Actions:
> 1) Increase interest rates in China by 2%
> 2) Impose a $100 billion USD tax on the manufacturing industry.
>