The downturn in the Chinese economy accelerated over the past month and could lead to high unemployment and social unrest, the country’s top economic planner warned on Thursday. In a rare news conference Thursday, Zhang Ping, chairman of the National Development and Reform Commission, said the government needed to take “forceful” measures to limit the slowdown in the economy, which included Wednesday’s large cut in interest rates – the fourth cut since September - and a sharp increase in fiscal spending. Noting that some domestic economic indicators point to an accelerated slowdown in November, Zhang said that “excessive production cuts and closures of businesses will cause massive unemployment, which will lead to instability”. Lex meanwhile warns of the impact of changing dynamics if China moves into deflation next year.
