Urgent need to cut flow of funds from real economy

HOW TO FURTHER BOOST THE REAL ECONOMY? Fu Chengyu and Li Daokui, two members of the 12th National Committee of the Chinese People's Political Consultative Conference, the nation's top political advisory body, said at its ongoing fifth plenary session that the country must end the speculation of the financial sector so that funds go back to the real economy. Beijing Youth Daily comments:

The outflow of funds from the real economy to the financial sector poses a serious challenge to China's manufacturing industry. Besides, a majority of the funds flow into the virtual, or the financial sector. The concentration of funds in the financial sector might in turn lead to speculation, which increases the risks to the whole economy. Worse, some capital flows into the real estate sector, which inflates the real estate bubble that in turn squeezes more money out of the manufacturing sector.

In order to further boost the real economy, it is urgent to cut the outflows of funds and properly "guide" them back to the manufacturing industry and other parts of the real economy.