THE HINDU Editorial Vocabulary- October 22, 2016- Topic 2
The latest GDP data from
China show the world’s second-largest economy seemingly in good health.
Third-quarter growth was 6.7 per cent, reflecting the government’s continued
pump priming by way of increased spending, and a robust property market. That
the headline number came in exactly at the same reading as the previous two
quarters also signals a level of almost unnatural stability in the economy’s
performance as expansion has hovered around 7 per cent or very close to it for
the last nine quarters, ensuring that there has been no hard landing as the key
global growth engine slows. Earlier this decade the Chinese government began a
‘rebalancing’ of the economy by shifting the focus away from a production and
export-led model to an increasingly domestic consumption and services reliant
one; it has had some success in this with consumption contributing 71 per cent
of GDP growth in the first three quarters of 2016. Still, the high level of
government spending and the mounting debt — core debt as a percentage of GDP
exceeded 250 per cent in the first quarter according to data compiled by the
Bank for International Settlements — are causes for concern. With the state
leading investment in infrastructure as a means to stabilise growth, public
spending climbed 12.5 per cent in the nine-month period, widening the nation’s
fiscal deficit. But it is the pace and size of the overall credit expansion
that have set alarm bells ringing, including at the International Monetary
Fund.
In a working paper titled
‘Resolving China’s Corporate Debt Problem’, the IMF has cited international
experiences with similar-sized credit booms to caution that China increasingly
risks facing slower growth or a “disruptive adjustment” unless it acts quickly.
With both scenarios fraught with danger, Chinese planners will be cognisant of
the social costs a sudden, sharper slowdown can extract. Japan’s economic
doldrums since its ‘lost decade’ at the end of the last century is a primer of
what could ensue from such an economic slowing. That leaves Beijing with the
unenviable choice of determining the contours of the ‘adjustment’ that would
need to be implemented post-haste to address the precipitous debt overhang. The
authors of the IMF paper advocate a comprehensive strategy and note: “Risks
appear high but manageable if the problem is addressed promptly, but the window
is closing quickly.” Their prescription includes the political will to identify
companies in financial distress, unmindful of whether they are state-owned or
private, and standards to get lenders to acknowledge the true levels of bad
loans. Steering a large ship through a course-changing turn with precision is
never easy, and ensuring that the $10-trillion economy stays on its feet while
rebalancing could prove a challenge.
Vocabulary
Pump: a light shoe, in particular.
Example: Then sandals of all sorts; then thongs, clogs, pumps , loafers, oxfords,
baby shoes, and desert boots.
Synonyms: force, drive, push, suck, draw, tap, siphon, withdraw, expel, extract
Robust: strong and healthy; vigorous.
Example: The Caplans are a robust, healthy lot
Synonyms: strong, vigorous, sturdy, tough, powerful, solid, muscular
Hovered: remain in one place in the air.
Example: Army helicopters hovered overhead
Synonyms: be suspended, be poised, hang, levitate, float, fly
Self-Reliant: reliant on one's own powers and resources rather than those of others.
Example: A self-reliant little girl
Synonyms: self-sufficient, self-supporting, self-sustaining
Mounting: a backing, setting, or support for something.
Example: He pulled the curtain rod from its mounting
Cited: summon (someone) to appear in a court of law.
Example: The summons cited four of the defendants
Synonyms: summon, summons, serve with a summons, serve with a
writ
Disruptive: causing or tending to cause disruption.
Example: Disruptive and delinquent children
Synonyms: troublesome, unruly, badly behaved, rowdy, disorderly, undisciplined
Scenarios: a written outline of a movie, novel, or stage work giving details of the
plot and individual scenes.
Example: Imagine the scenarios for four short stories
Synonyms: plot, outline, synopsis, storyline, framework, screenplay, script
Cognisant: having knowledge or being aware of.
Example: Statesmen must be cognizant of the political boundaries within which they
work
Enviable: arousing or likely to arouse envy.
Example: An enviable reputation for academic achievement
Synonyms: desirable, desired, favored, sought-after, admirable, covetable
Precipitous: dangerously high or steep.
Example: The precipitous cliffs of the North Atlantic coast
Synonyms: steep, sheer, perpendicular, abrupt, sharp, vertical