Beijing: Zhongguo qingnian chubanshe, 2005. 260 p.*

The Chinese economy is rightly considered to be one of the fastest growing in the world. Indeed, during the period of reform that has been going on in China for more than a quarter of a century, the average annual growth rate of national GDP exceeded the 9% mark. Much less well-known among non-specialists is the fact that Chinese economic growth is uneven and that it is characterized by specific cyclical patterns. Sharp acceleration of economic dynamics is usually accompanied by jumps in inflation, and to overcome the emerging "overheating" of the economy, the authorities resort to administrative and financial methods to limit aggregate demand. As a result, price growth is restrained, but along the way, economic growth slows down, it is difficult to create new jobs to absorb excess labor resources, stocks of unsold products accumulate, and the problem of non-payments in the financial system becomes more acute. These processes, in turn, contribute to the weakening of the financial squeeze on the part of the authorities, which gives rise to a new "warming up" of the economic situation.

Such trends were evident in the Chinese economy as early as the 1980s, and in the second half of the 1990s, the already familiar pattern of the economic cycle underwent a significant modification. This time, the downward phase of the cycle was not limited only to a slowdown in economic growth against the background of lower inflation. During the rapid recovery of the first half of the 1990s, huge overcapacity and inventory surpluses accumulated, and the Chinese economy has been plunged into deflation since 1998. Now the authorities have had to specifically stimulate economic growth by boosting the economy.

* Yu Yongding, He Fan, and others. Summer of the Chinese Economy: an analysis of the current macroeconomic situation and macroeconomic policy. Beijing: Chinese Youth Publishing House, 2005. 260 p.

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public spending, including for investment purposes, by easing tax and monetary policies. Although unprecedented financial expansion provided up to 1.5-2.0 additional percentage points of economic growth in 1998-2002, domestic demand remained relatively sluggish throughout this period,and deflation was not overcome.

All the more remarkable is the new turning point in economic dynamics, which was clearly marked at the turn of 2002-2003, when the economic growth rate in China again rushed to double digits (in 2003, the GDP growth rate was 10.0%, in 2004 - 10.1%, in 2005 - 9.4%). Moreover, the initial phase of the new cycle was characterized by a significant peculiarity. The leading sectors of the recovery this time were not light industry and the production of relatively simple durable goods, but the real estate sector, the automotive industry and the heavy industries that serve their production demand - steel, aluminum, cement, etc. It was the sharp increase in production and investment in this relatively limited range of industries that led to the overall acceleration of the economy. economic growth, while the rate of expansion of consumer demand in the economy remained quite moderate - in contrast to the situation that occurred in previous economic cycles.

The price dynamics also looked unconventional. The growth rate of prices for production resources in 2003 - 2004 became double-digit. As for consumer markets, the expected surge in inflation did occur in mid-2004, but it was short-lived, affecting only a relatively small number of categories of food products, and the retail price index did not exceed 5% year-on-year. Nevertheless, the appearance of signs of a new "overheating" prompted the authorities to adjust their economic policy again from the end of 2003. Control over the approval of investment projects and over the allocation of land plots for the construction of enterprises in the most dynamically growing industries was tightened, bank lending to such industries was restrained by both administrative prohibitions and economic methods - through increasing interest rates and mandatory reserve requirements.

What ultimately explains the new change in the macroeconomic environment in China? What are the prospects for the development of events and how should state policy be built in the new conditions?

Currently, Chinese economists are actively discussing these issues. One of the first books specifically devoted to this issue was a peer-reviewed monograph. The authors ' team is based on a group of young scientists from the Institute of World Economy and Politics of the Autonomous Non-Governmental Organization of the People's Republic of China, united around the director of this institute, a recognized master of macroeconomic analysis in China, Yu Yundin. Experts from other scientific institutions were also involved : the Development Research Center under the State Council of the People's Republic of China, Peking University, and the Central University of Economics and Finance.

Ideologically, the work under consideration belongs to the direction in modern Chinese economic science that focuses on research methods borrowed from Western literature to a much greater extent than on official political and propaganda installations. Structurally, the book consists of nine chapters: some of them are devoted to a general assessment of the current economic situation, others deal with more specific problems, such as the state of the real estate market, prospects for currency regulation policy, etc. The points of view of individual authors do not always coincide, and in general, the book describes the beginning of a fundamentally new phase in we can hardly expect definitive answers to the questions posed by time itself. But not only their very clear statement in the book, but even the existing discrepancies in the authors 'positions and "bottlenecks" in their logical constructions allow us to much better understand the essence of the problems discussed and try to at least outline possible ways to solve them.

The first chapter, written by Zhao Xiao and Tan Donghai, shows that there really are no uniform, generally accepted answers. As they note, the new acceleration of economic growth came as a surprise to both the authorities and most economic analysts: back in the autumn of 2002, experts were quite pessimistic about the prospects for getting out of deflation. In 2003-2004, professional discussions focused on the following questions: can the newly emerged situation be described as a new one?

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"overheating" of the economy, and what is the greatest potential danger to macroeconomic stability-an acceleration of inflation or a return to deflation. The discussion continued even after the authorities ' economic policy was clearly dominated by the policy of anti-inflationary tightening.

Proponents of one of the points of view (among the most famous economists - Fan Gang, Wu Jinlian, Xu Xiaonian) believe that "overheating" occurred already in mid-2003. This is evidenced by abnormally high investment growth rates (in some industries approaching 100%), and revealed numerous resource constraints for economic growth. "Overheating" in itself does not automatically change the deflationary trend to an inflationary one. Since consumption growth remains relatively slow, investment-driven" overheating " leads to higher prices for industrial products rather than consumer goods. But the main reason that the expansion of aggregate demand is accompanied by relatively moderate inflation is the continuing excess of production capacity. And if additional capital is directed to the "overheated" sectors that produce scarce investment goods, this is fraught with the formation of new overcapacity and the resumption of deflation. Therefore, the reorientation of economic policy towards curbing economic growth and investment growth is quite fair.

Other economists (Li Yining, Liu Guoguang, Xiao Zhoji, etc.) believe that there is really no need to talk about any "overheating". Economic growth, in their opinion, is now close to potentially possible, and the ratio of high GDP growth rates and low inflation rates looks the best for the entire period of Chinese reforms. The acceleration of economic growth was facilitated by progressive changes in the structure of consumer demand associated with an increase in household incomes, as well as the country's accession to the WTO, which created more favorable conditions for Chinese exports. In other words, the reversal of cyclical dynamics was objectively caused, and the economy has really matured the prerequisites for getting out of deflation, and this can only be prevented by unjustified tightening of financial policy.

A number of economists (most famously Lin Yifu) take the "middle ground" approach, which calls for a balanced policy that takes into account the existence of multidirectional trends in the national economy. In their opinion, along with" overheated " industries in the economy, there are also entire sectors that, on the contrary, need state incentives (agriculture, services, etc.). Uncontrolled growth of investment in leading industries will inevitably lead to the accumulation of new excess capacity, and the main danger is a new change in the inflationary trend to a deflationary one. Therefore, economic policy should be aimed, on the one hand, at curbing investment in "overheated" sectors, and on the other, at preventing a sharp "cooling" of aggregate demand and a return to deflation.

More than once, Zhao Xiao and Tan Donghai sarcastically point out that such a discrepancy in the positions of leading representatives of Chinese economic science cannot but raise doubts about its predictive capabilities (p. 8, 21, etc.). According to Zhang Qi, another member of the author's team, the reasons for the disagreement are largely due to the fact that Chinese economic theory has not yet developed clear criteria for judging the presence or absence of "overheating" (p.90). How do the authors of the book solve this problem?

In the chapter written by Zhang Qi, an attempt is made to characterize the current situation using the tools of econometric analysis. In Western economic theory, he notes, an indicator of "overheating" is considered a "positive gap" between the real volume of production and the potential of aggregate supply. If actual output exceeds potential output, it means that the economy is "overheated" and economic growth cannot be sustained. A quantitative analysis of the array of data on the Chinese economy for the 1980s and 1990s fully confirms this pattern: if the actual output in those years went beyond the potential, then inflation accelerated, which was the most obvious symptom of "overheating". However, calculations based on the data for 2003 performed by Zhang Qi on the basis of two different methods gave contradictory results: in one case, the "positive gap" and, accordingly, "overheating" were actually recorded, and in the other case, the "positive gap" and, accordingly, "overheating" were recorded.-

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gom-no. Coupled with a very unconventional picture of inflation, these results led Zhang Qi to conclude that the economy is somewhat overly "warmed up", but there is no real "overheating" in it, and it is not very likely in the near future, since the potential of aggregate supply in China is constantly increasing due to the intensive accumulation of capital (pp. 105-107).

A more detailed rationale for this thesis is provided in the chapter written by Yu Yongding. The new acceleration of economic growth, in his opinion, indicates that the long-term anti-deflationary policy of the authorities finally led to success. The investment boom in the real estate and automotive industries was made possible by efforts to develop mortgage and other types of consumer lending since the late 1990s. The rise of housing and infrastructure construction, as well as the activation of the automotive market, in turn, led to a rapid increase in demand for intermediate products. And the fact that in the course of this process "bottlenecks" were revealed in the raw materials industries and investments went there, in itself, cannot be considered a general economic "overheating". According to Yu Yundin, this rather indicates that in the past, raw materials industries were underinvested, and the current boom in capital investment there is compensatory in nature, it will gradually fade spontaneously as demand is saturated.

All this does not mean, Yu Yundin continues, that there are no new imbalances during the upswing. It is true that there has been an excessive increase in investment in a number of industries, but the authorities do not need to implement a comprehensive cap on aggregate demand. The priority of economic policy should be to maintain high (at the level of 8.5 - 9%) economic growth rates; this is also necessary to meet the challenges of modernization, and, in particular, to ease tensions in the labor market. And in order to curb excessive investment growth in certain industries and prevent inflation from accelerating, it is enough to make some private adjustments to economic policy: limit the scale of consumer lending and strengthen control over the construction of infrastructure facilities on the ground. As for the raw materials industries, there is no need to specifically restrain investment; moreover, in certain cases, they should even be specifically stimulated to overcome resource constraints (pp. 44-84).

So, there is no" overheating", but there is a new phase of cyclical expansion, during which the economy has developed a kind of growth disease in the form of structural "bottlenecks". According to He Fan, August is usually much warmer than March, but this does not mean that nature "overheats" in summer (p.2; hence, by the way, the title of the book). Perhaps, one could agree with all this, if not for a few "buts". Even if the turnaround occurred under the influence of the policy of stimulating economic growth, which has been implemented since 1998, but why did it happen in 2003, and not earlier? In addition, it is worth recalling that the mechanism of anti-deflation policy itself was largely based on public investment in infrastructure and heavy industry, but at the same time, during the years of deflation, the problem of raw materials industries was not insufficient, but oversupply, and the authorities specifically limited it. All these considerations lead us to doubt that the current "explosion" of investment in raw materials is a compensation for their previous deficit. And if it happened for some other reason, then Yu Yundin's appeal to the effectiveness of anti-deflation policies as the main reason for the economy's entry into a new cycle is beginning to raise doubts.

They are even more pronounced after reading those chapters of the book that offer explanations for the current non-standard inflationary situation. According to Yao Zhizhong, the divergence in the price dynamics of investment and consumer goods is a direct consequence of the very high accumulation rate in China, and its maintenance, in turn, is due to the course of the urbanization process. The share of urban residents in the total population of the PRC increased from 17.9% in 1978 to 40.5% in 2003 (p. 116). Rural migration to cities has been particularly active since the mid-1990s. With the growth of cities, the scale of investment in infrastructure and real estate increases, which leads to an increase in demand for building materials, metals, cement, and repair services, and accordingly investment in these industries increases. Since the level of urbanization in China is still relatively low, this process will continue to develop. As a result, not only will there be a high accumulation rate,

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It is a system that makes rapid economic growth possible, but there will continue to be a state of affairs where prices for industrial products grow faster than prices for consumer goods. And this is normal, Yao Zhizhong believes, the only way to ensure the flow of resources to the industries that directly support the course of urbanization (p. 116-125).

One cannot but agree that the process of urbanization in China largely forms the basis for long-term maintenance of high rates of economic dynamics. But this does not mean that the whole variety of macroeconomic phenomena is ultimately determined by the growth of the urban sector of the economy. The progressive course of urbanization itself does not exclude significant fluctuations in economic growth. Practice shows that the development of the real estate sector, the main embodiment of urbanization, is also subject to cyclical fluctuations: the Chinese real estate sector boomed during the "overheating" of the economy in the early 1990s, then investment growth in this industry sharply declined with the onset of deflation, and a new recovery occurred only at the beginning of this decade. As for the asynchronous dynamics of prices for various categories of goods, nothing like this was observed in previous cycles. Yao Zhizhong's argument therefore looks like a mixture of different categories, as an attempt to directly explain current market phenomena, addressing long-term structural trends.

The approach outlined in the chapter written by Ba Shusung and Hua Zhongwei seems to be more fruitful. Rising prices for raw materials and energy carriers, they note, should in theory lead to an acceleration in the growth of prices for manufactured goods through production cost chains. In the 1980s and 1990s, this occurred with a time lag of 3 to 6 months. However, during the current cycle, this "transfer mechanism" for some reason does not work. In search of a solution, the authors turn to the analysis of the situation on the consumer market. The annual growth rate of retail trade turnover, which reached more than 20% in the mid-1990s, has fallen to less than 10% since the beginning of deflation and remains at this level to this day. Numerous market surveys in 2003 - 2004 recorded a significant excess of supply over demand for the absolute majority of categories of consumer goods.

In recent years, the structure of consumer demand has shifted from a predominant focus on the purchase of food, clothing, and household goods to purchases of cars, apartments, communications services, and travel services. But a closer look reveals that the demand for goods and services of the "new generation" is presented by a wealthy minority - representatives of high-income social groups. In this sense, the current situation is very different from the consumer boom of the 1980s, when it was about increasing the purchasing power of the main body of society. The income dynamics of farmers, who still make up the majority of the Chinese population, have slowed sharply since the mid-1990s, and the rural population's share of national consumer spending has fallen from 50.2% in 1991 to 35.0% in 2003, meaning that two-thirds of the Chinese population now accounts for only one-third of the country's consumer demand (p. 175).

The prospects for increasing the total consumer turnover due to the demand of high-income groups of the population look rather uncertain, firstly, because of the limited number of such consumers, and secondly, because of the statistically revealed tendency of such people with a further increase in income to force savings, rather than current consumption. The authors conclude that the lack of consumer demand has already become a "bottleneck" that hinders the sustained growth of the Chinese economy, and this state of affairs is the result of deepening income inequality (pp. 174-175).

But why doesn't the" transfer mechanism " of inflation ultimately work? According to Ba Shusong and Hua Zhongwei, this is due to the difference in market structures in the two groups of industrial sectors. In the raw materials and investment goods industries, there are high barriers to entry for new players, there is a significant share of state-owned enterprises, and in general, these industries are characterized by monopolistic structures that allow enterprises to dictate prices to the buyer. On the contrary, in consumer goods industries, investment "barriers" are low, and there are competitive markets where price increases are constrained by demand constraints. Therefore, according to the authors 'logic, the inflation impulses coming from the investment sector are eventually "extinguished" in the consumer sector (p. 186).

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The pace of reforms in certain sectors of the Chinese economy was indeed uneven. However, it should be said that despite all the peculiarities of the modern Chinese institutional system, differences in market structures in the investment and consumer sectors exist in any industrial economy - they are caused by differences in the sets of factors of production used and different scale effects in various industries. And the" transfer mechanism " of inflation is functioning properly. So the explanation offered by the authors looks insufficient. But it is important that they themselves actually specify it when they point out that in the consumer sector there is not just a competitive environment, but a situation of overproduction that generates pressure in favor of lower prices (p.186). And if we take this idea to its logical conclusion, we have to state that the consumer market still has a deflationary background due to an excess of production capacity. And then the whole argument of Yu Yundin and those of his colleagues who associate the beginning of a new cycle with the success of anti-deflation policy is already under attack. At the same time, the fact of a new acceleration of economic growth due to a number of leading industries is indisputable. The picture is paradoxical: one part of the economy for some reason managed to get out of deflation, and the other part did not.

In this case, the discussed issue of" overheating "will also have to be put in a new way: if there is" overheating", then it can only be local, and not comprehensive. Can those industries that have developed rapidly in recent years be considered "overheated"? As applied to the real estate sector, which largely determined the overall dynamics of the recovery, this problem can be formulated as follows: is there a healthy development of the real estate market, or did the rapid price growth and investment boom break away from real effective demand and lead to the formation of a speculative "soap bubble"in the market? A separate chapter of the book is devoted to this topic, and it consists of three fragments written by authors defending different positions.

According to Yan Jianfeng, there is no question of a "soap bubble". Since the late 1990s, growth in the real estate sector has been closely correlated with an increase in the purchasing power of the urban population, and the market is now nationally balanced in terms of supply and demand. In some cities, the growth in real estate prices has indeed broken away from the growth in employment and wages, but this is due to an increase in rents for land plots used for construction (p. 149-157).

Yin Zhongli, on the other hand, believes that a "soap bubble" is already taking place. He draws attention to the fact that the real estate boom was the result of a complex set of factors. On the one hand, since the late 1990s, there has been a gradual liberalization of restrictions on the migration of peasants to cities, and this constantly supports the demand for housing. At the same time, a housing reform is being implemented, which involves moving away from the state distribution of apartments in favor of selling them on commercial principles. But, on the other hand, there are also specific institutional factors that give market development unhealthy features. The price increase was further boosted by the introduction of a tender system for land allocation starting in mid-2002. The fact is that local authorities actually enjoy a monopoly position on the land market, and they can impose inflated rental rates on bidders. As a rule, companies affiliated with local administrations participate in the auction, they agree to such lease terms, so they have to be accepted by other participants. As a result, the real estate sector is experiencing excessive, "forced" investment demand and increasing speculative activity, which is further enhanced by the fact that against the background of many years of stagnation and monotony of Chinese financial markets, real estate has become the most profitable investment tool, it is in many cases bought not for their own needs, but for resale or rental. As Yin Zhongli sums up, administrative measures are needed to curb real estate speculation. In its current form, this market serves the interests of only the well-off part of the population. If the "soap bubble" bursts, it is possible to accumulate overdue debt in the banking system, which is fraught with a general financial crisis in the country (p. 137-145).

Yao Zhizhong, who also contributed to this chapter, generally believes that the issue of macro-control measures in relation to the real estate market should be resolved regardless of whether there is a "soap bubble" or not, but based on threats to macroeconomic stability.-

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risks that may arise due to fluctuations in this market. In contrast to Yan Jianfeng, he believes that it is difficult to judge the existence of a "soap bubble" by comparing prices and incomes simply because China does not yet have reliable statistics on income and expenses for buying apartments (p.163). The probability of a "bubble" can rather be estimated by the level of profitability in the rental sector of real estate. If it is significantly lower than in transactions with other assets, it means that real estate prices are too high, a "soap bubble" has emerged, and it will burst as capital moves to areas with higher returns. So far in China, the profitability of real estate transactions is about the same as for other types of assets, but it is rapidly declining. This, in turn, creates risks for further financial reforms, as the liberalization of capital flows and diversification of investment instruments will increase the threat of a collapse in the real estate market. Therefore, even if there is no" soap bubble " yet, this market has already become a potential source of macroeconomic instability, and restrictive measures are needed against it (p. 158-165).

So, even from the point of view of Yao Zhizhong, for whom the real estate sector is the" pole of growth " of the Chinese economy in the long term, the situation in recent years in this area looks like an unbalanced, excessive expansion. But what is the reason for this development? Yu Yundin, we recall, attributed it to the fact that during the implementation of the anti - deflation policy, excessive issuance of mortgage loans was allowed, which, in his opinion, should be limited (pp. 63-66). But is this explanation sufficient? In other words, is the excess mortgage issue itself a consequence of certain political decisions and lobbying pressure, or did it have deeper reasons? The answer to this question can be found in those chapters of the book that are devoted to the current features of monetary policy in China.

According to Zhang Wu, the boom in the real estate sector is ultimately related to the massive influx of foreign speculative capital into the country, and this, in turn, was caused by widespread expectations of a revaluation of the yuan in international financial markets (pp. 195-196). Since the mid-1990s, China's monetary policy has been based on maintaining a fixed exchange rate of the yuan against the US dollar by economic and administrative means. However, with the growing scale of Chinese exports and the liberalization of foreign capital's access to the domestic economy, the situation of a "double positive balance" has taken root in the balance of payments of the PRC-both on the current account and on the capital account, and this objectively creates prerequisites for the strengthening of the national currency. Chinese officials repeatedly stated in 2002-2003 that the renminbi exchange rate would remain stable under all conditions. However, such "psychological treatment" of the markets could not overcome revaluation expectations.

To maintain a fixed exchange rate, the People's Bank of China was forced to buy up more and more foreign currency coming into the country, thereby increasing foreign exchange reserves and expanding the yuan monetary base. And if the general acceleration of inflation associated with this was very moderate, then in the real estate market, the most highly liquid asset, prices rapidly rushed up. This was followed by a sharp increase in investment in real estate and related industrial sectors, which eventually led many to talk about "overheating" in such industries. The authorities 'ability to resist "overheating" was obviously limited, as the various goals of monetary policy came into conflict with each other: to contain excessive investment activity, monetary policy tightening is necessary, which in itself means an additional increase in asset returns, and this, in turn, is fraught with an even greater influx of speculative capital and increased revaluation risks. expectations. Within the framework of the previous system of currency regulation, these problems are unsolvable - this opinion was expressed in their chapters by Zhang Wu, Yu Yongding, and He Fan (p. 81 - 82, 207 - 208, 248 - 250). There is a need to move to a more flexible mechanism for setting the exchange rate, which in the coming years will inevitably be associated with the strengthening of the yuan.

However, according to the authors, changes in the monetary policy mechanism should not be limited to the liberalization of currency regulation. So far, during the implementation of macroeconomic stabilization measures, excess credit issuance has been restrained mainly by direct quantitative limits set for individual banks by the People's Bank of China. However, an alternative solution is also possible - through the liberalization of administratively set interest rates. Their lack of flexibility has already caused many problems: in 2001 - 2002, in the context of internal deflation and against the background of an unprecedented softening of the economy.-

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Due to the lack of monetary policy in Western countries, interest rates in China remained relatively high, which significantly stimulated the inflow of foreign speculative capital. Now, with the start of a new economic cycle, on the contrary, it is necessary to raise interest rates - not so much to solve anti-inflationary problems, but to limit excess investment formed due to the easy availability of bank credit. This problem has not only a tactical, but also a strategic dimension, because the swelling of investment demand was precisely the root cause of the periodic "overheating" of the economy (pp. 78-82, 250-252). Now, after some time, it can be said that Chinese economic policy has indeed evolved in the direction suggested by the authors of the book: in October 2004, interest rates were raised and partially liberalized, and since July 2005, the gradual revaluation of the yuan has begun.

I will summarize some results, setting out my own vision of the situation along the way. Yu Yundin's basic hypothesis that the change in economic dynamics was the result of an anti-deflationary policy needs at least some adjustment. A closer look reveals that the deflationary trend has not been reversed across the entire economy. Therefore, if the concept of "overheating" applies to the economic situation of recent years, it is a special, local "overheating": it was not, as before, associated with an avalanche-like increase in demand throughout the economy, but consisted in the formation of "soap bubbles" in a limited number of industry markets. The acceleration of economic growth did occur under the influence of shifts in macroeconomic policy, but they were also unconventional, mostly due to external factors. A sharp increase in the inflow of foreign speculative capital to the country eventually led to an increase in yuan money issuance, which was an alternative to the monetary policy easing that took place in the initial phases of previous economic cycles. The additional liquidity received by the banks was used primarily for lending to industries that serve the demand of high-yield groups (automotive industry, real estate sector) and integrated industries that supply intermediate products (metallurgy, construction materials production).

It can be said that the reason for such an unconventional "overheating" was the dissonance between the achieved high degree of involvement of the national economy in world economic processes, on the one hand, and the preservation of an excessively strict system of regulating the exchange rate and interest rates in China, on the other. However, there seems to be a deeper dimension to the problem. The demand of the wealthy minority of the population became the engine of accelerating economic growth in 2003-2005. It is estimated that about 130 million people (40 million families) live in China, mainly on the urbanized east coast, with per capita incomes already exceeding the $ 3,000 mark per year. This is 1/10 of the total population of the country, and some of these people are already ready to buy cars and real estate. Many of them are employed in enterprises operating for export, including enterprises with foreign investment. At the same time, the problem of oversupply in the domestic market of China itself remains unresolved. The majority of the population continues to exist in conditions of overproduction, supported by low incomes and the operation of institutional mechanisms that cause the creation of excess production capacity.

So, in recent years, China has made a certain movement towards the formation of a dual-type economy. Moreover, in this economy, various types of macroeconomic imbalances co-exist: inflation - in one sector, and overproduction and deflationary background - in another. If earlier inflationary and deflationary dangers alternated with each other at different stages of the economic cycle, now they are present in the economy simultaneously. Therefore, despite the appearance of macroeconomic well-being (high economic growth rates with low inflation), it is too early to conclude that China has already achieved harmonization of the development process. In such a huge country, the course of industrialization and urbanization creates favorable conditions for maintaining high rates of economic growth in the long term. But on this path, new exacerbations of structural imbalances and social contradictions are quite possible. Therefore, a book prepared by Chinese scientists can be perceived not only as a statement of current problems, but also as a warning for the future.

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