On Monday, share prices dropped sharply all over the world due to fears of an economic crash in China. China's stock exchanges had just experienced their worst slump in eight years. According to some commentators a global economic crisis can only be prevented by strengthening buying power. Others are urging the central bank managers to turn on the money printers in order to create growth.
No growth without fair distribution
Following the plunge in stock markets across the globe, the centre-left daily Libération calls for a more sustainable and just policy for the global economy: "The risk lies in the trend of inequality that has dominated for thirty years now and hinders the redistribution of increases in productivity. … For almost a generation now, the buying power of the masses has stagnated while that of the upper classes has risen exponentially. And as Henry Ford (who was no left-winger) once said: if the workers are poorly paid, they don't buy cars. As generous as the billionaires may be, they can't stimulate global growth all on their own. That growth is being curbed above all by the income gap. And as long as the world's leaders fail to see this, the economic stagnation and unemployment will continue."
Don't leave it to speculators
The state must take the sceptre out of speculators' hands once more, the Catholic daily newspaper Avvenire concludes in view of the global stock market collapse which began in China: "The message we are receiving in the face of this turbulence on the Chinese market is that today the financial system is the only true world power. We should not ignore it or leave it to experts. The massive speculation bubbles that were once the exception are threatening to become the rule in this new financial capitalism. … As long as our economies create affluence that is decoupled from our working lives, then it is probable that this fake affluence will be destroyed by the Chinese financial bubble today and by another tomorrow. ... In order to avoid such unfortunate scenarios, politics must once again take control of the situation, both on a local level and on a global level."
Central banks must print more money
The latest slump in the international markets has to do with the fact that the central banks are not printing enough money during the debt crisis, according to the economist Csaba Szabó on the opinion portal Mandiner: "In the current financial system, money is generated by debt. More and more money becomes necessary so that the economy can keep growing, whereas the debts cannot grow infinitely. Right now we have reached a point at which everyone has a maximum amount of debt. The central banks have to keep on printing new money in order to prevent the system from collapsing. At the moment we have the problem that the money that has been printed up to now has turned out to be insufficient. For this reason it is necessary that the central banks continue printing money in order to prevent collapse."
Communist double strategy irritates investors
The investors are panicking not least because they do not know - when active in China - what kind of system they are dealing with. This is the conclusion the centre-left news magazine Polityka reaches in its online edition: "It is true that for many years the government has been emphasising the strength of its economic model, in which free markets make Chinese affluence possible. But at the same time, the market is subjected to a special kind of control which is supposed to protect the Chinese economy from the negative effects of economic cycles. This means that the party names the target and defines the scale of economic growth - and these guidelines are then adapted in accordance with current developments. This is intended to ensure that China's economy does not cool off, is well prepared against losses, and grows at a regulated rate. Now, however, we can see that this strategy does not work at all."
Highly indebted EU states in danger
China's economic downturn could be fatal for debt-ridden EU states, warns the liberal business daily Jornal de Negócios: "Countries that are highly indebted would be the worst hit by a scenario of deflation triggered by a major downswing in the economy and a devaluation of the yuan. But also those that (like Portugal) are most dependent on Chinese investments or raw materials such as oil. … Such a crisis in China could definitely influence the situation in Greece or Portugal, and potentially also in Italy and France. In the case of Portugal, all these factors are present: we still have huge debts, particularly our businesses. Moreover the proportion of Chinese direct investment is very high. … And that means Portugal's economic recovery is in the hands of the government in Beijing."