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Weak demand is dragging down China’s economic growth. The real problem isn’t a shortage of money: the broad money supply (M2) now exceeds CN¥155 trillion ($25 trillion), or 200% of GDP, and continues to grow by 12-13% annually. Rather, the current slowdown reflects financial (1) on the real economy – a problem that will be difficult to (2) in the near future.Ironically, these financial constraints have tightened against a background of strong financial-sector growth. Indeed, it is the financial sector’s (3) , driven partly by the success of market-oriented innovations, that has fueled growth in China’s M2 and credit assets.
This trend can be traced back at least to 2004, when a fast-growing trade surplus and (4) capital inflows, as well as (5) exchange-rate appreciation, forced the People’s Bank of China (PBOC) to resort to monetary expansion as a (6) against the resultant risks. Since then, China’s unremitting investment in infrastructure and real estate has fueled domestic demand, absorbing and (7) this credit growth. In 2009, China took things a step further, with a massive three-year (8) plan that expanded bank credit to more than CN¥20 trillion.
As the money supply and financial sector expanded, so did the shadow banking system, which operates beyond the reach of risk-mitigating regulation. According to data from Moody’s Investors Service, by the end of last year, credit from China’s shadow banking system had nearly tripled relative to 2011, to CN¥65 trillion. Since 2006, (9) banks’ share of total credit (10) from 10% to 33%.
- 1) depletion
2) abjection
3) constraints
4) assailment
5) diverseAnswer – 3)
Explanation: constraints – a limitation or restriction. - 1) aridity
2) different
3) assault
4) reverse
5) encroachmentAnswer – 4)
Explanation: reverse – move backwards. - 1) blitzkrieg
2) prosperity
3) dissimilar
4) paucity
5) pauperismAnswer – 2)
Explanation: prosperity – the state of being prosperous. - 1) massive
2) offensive
3) onslaught
4) unequal
5) indigenceAnswer – 1)
Explanation: massive – large and heavy or solid. - 1) starvation
2) straits
3) distinct
4) injury
5) relentlessAnswer – 5)
Explanation: relentless – unceasingly intense. - 1) hedge
2) invasion
3) scarcity
4) barrenness
5) beardAnswer – 1)Explanation: hedge – a fence or boundary formed by closely growing bushes or shrubs.
- 1) beggary
2) reinforcing
3) blitz
4) privation
5) affrontAnswer – 2)
Explanation: reinforcing – strengthen or support (an object or substance), especially with additional material. - 1) penury
2) stimulus
3) exiguity
4) repel
5) hindranceAnswer – 2)
Explanation: stimulus – a thing or event that evokes a specific functional reaction in an organ or tissue. - 1) tranquilizer
2) brightness
3) meagerness
4) shadow
5) inadequacyAnswer – 4)
Explanation: shadow – a dark area or shape produced by a body coming between rays of light and a surface. - 1) soared
2) driblet
3) particle
4) teardrop
5) smidgenAnswer – 1)
Explanation: soared – fly or rise high in the air.