A Study of the Real Economy and the Virtual Economy

Abstract

The economic growth of China has been slowing since 2015. In the third quarter of 2015, the growth rate of GDP fell drastically to less than 7% year over year. This represented a record low since the global sub-prime crisis in 2009. Recently, the State Council convened several conferences to reiterate the principle of guiding finances toward the real economy; the council stated that the relationship between the virtual economy and the real economy should be properly handled so that the former could better serve the latter. Economists agree that the virtual economy, within a reasonable range, can promote the development of the real economy, while over expansion might cause damage. However, so far, China has not set its standards and boundaries for the ratio of the real economy to the virtual economy.