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China news tagged with: economic growth (347)

• OECD: Inequality in China Leveling Off

  

  A new report from the OECD on China says the inequality gap in China is not quite as bad as previously thought, the Wall Street Journal reports:

  The OECD, in its economic survey of China published Tuesday, said more welfare spending in rural areas and increased migration to cities helped arrest a widening of the income gap. The Paris-based organization urged China to lower what is still a fairly high level of inequality by further boosting social programs and eliminating discrimination against rural residents.

  The report is the OECD’s second major study of China, which isn’t a member of the organization. China’s economy is on pace to surpass Japan this year as the world’s second-biggest after the U.S. The OECD urged China to take a range of measures to liberalize its economy, such as freeing up interest rates to encourage banks to lend more to small companies, and privatizing state-owned enterprises. It also said that allowing the currency to appreciate would help the government manage the economy better.

  China’s breakneck economic growth of the past three decades has pulled hundreds of millions of people out of poverty. But the incomes of people at the top have risen much faster than the rest, creating new divisions in a once-egalitarian society. Tensions between property developers and dispossessed farmers, and between factory bosses and their rural work force, are often a flashpoint for social conflict. That has pushed China’s government to narrow the gap, and officials have repeatedly said they will do more to boost incomes of the worst-off.

  Read the full OECD report here.

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  • February 2, 2010 9:26 PM

• China Leads Better-Than-Expected Global Recovery

  

  A 10% growth rate in China is helping fuel a global economic recovery, though developed economies such as the U.S. will recover more slowly, the IMF says. From the New York Times:

  The monetary fund expected growth of 10 percent in China this year, up from 8.7 percent last year, as the country’s economy leads a broader Asian recovery. Emerging economies in Asia will probably grow at an average 8.4 percent pace this year and next, a strong improvement over last year’s 6.5 percent rate, the report said.

  The managing director of the I.M.F., Dominique Strauss-Kahn, spoke recently in Hong Kong of “a historic moment for Asia,” as some countries there moved rapidly “to identify the key elements of a new model that can deliver sustained growth.”

  Advanced economies are expected to return to a growth rate of 2.1 percent this year, after a contraction 3.2 percent in 2009. But “the recovery in advanced economies is still expected to be weak by historical standards, with real output remaining below its pre-crisis level until late 2011,” the report said.

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  • January 26, 2010 11:16 AM

• China’s Economy Shows Strong Growth

  

  China’s economy is poised to overtake Japan’s to become the second largest in the world. From the BBC:

  China says its economy expanded by 8.7% in 2009, exceeding even the government’s own initial expectations.

  The pace of change increased as the year went on, with growth in the final quarter of 2009 increasing by 10.7% from 2008.

  …But [Ma Jiantang, head of the National Bureau of Statistics] played down speculation that China’s economy had now overtaken Japan’s.

  “According to the UN standard – that is $1 a day – there are still 150 million poor people in China. That is China’s reality,” he said.

  “So despite the increase in our GDP and economic strength, we still have to recognise that China is still a developing country.”

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  • January 20, 2010 11:08 PM

• As China Rises, Fears Grow on Whether Boom Can Endure

  

  A debate is raging among financial experts over China’s economic growth and whether or not it is a bubble waiting to pop. From the New York Times:

  New high points, it seems, are reached daily. China surged past the United States to become the world’s largest automobile market — in units, if not in dollars, figures released Monday show. It also toppled Germany as the biggest exporter of manufactured goods, according to year-end trade data. World Bank estimates suggest that China — the world’s fifth-largest economy four years ago — will shortly overtake Japan to claim the No. 2 spot.

  The shift of economic gravity to China has occurred partly because growth here remained robust even as the world’s developed economies suffered the steepest drop in trade and economic output in decades.

  But that did not happen by chance: China’s decisive government intervention in the economy, combined with the defiant optimism of its companies and consumers, has propelled an economy that until recently had seemed tethered to the health of its major export markets, including the United States.

  Beijing’s state-run news media, indulging in a moment of self-congratulation, have hailed China’s new economic prominence as proof of national superiority.

  When hedge fund manager James Chanos (who foresaw the downfall of Enron) recently forecast China’s economic crash, other observers have been quick to offer counter arguments. See “Jim Chanos Is Wrong: There Is No China Bubble” from Forbes and “Chanos and Rogers: Right and Wrong on China.”

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  • January 11, 2010 9:37 PM

• China Overtakes Germany as World’s Biggest Exporter

  

  China has officially surpassed Germany as the world’s largest exporter. From the Washington Post:

  China’s customs agency released figures Sunday showing that total exports last year were more than $1.2 trillion, slightly ahead of the $1.17 trillion forecast for Germany by its foreign trade organization, the Federation of German Wholesale and Foreign Trade.

  “This is just one more step by China in attaining economic size commensurate with its population,” said Arthur Kroeber, managing director of Dragonomics, an economic research firm in Beijing. Germany has a population of about 80 million, while China’s population is about 1.3 billion.

  “The next big news will be when China surpasses Japan to become the world’s second-biggest economy,” Kroeber said. Analysts say that is likely to happen this year.

  An opinion piece from Germany’s Deutsche Welle says these figures don’t mean a lot:

  The People’s Republic exported goods worth a total of 1,070 billion dollars (749.7 billion euros), according to figures published by Beijing a few days ago.

  Now, data from the German statistical office in Wiesbaden shows that German exports for the same period total some 734.6 billion euros ($1,052 billion). Germany, which for years took pride in its position as “world champion exporter”, has now lost the top spot, falling roughly 15 billion euros behind.

  But is any German business leader now looking for a new sword, so that he might fall on it in shame? Most likely not, for this comparison between Germany and China is nothing more than an exaggerated obsession within the media.

  People love the highest, the fastest, the furthest, the most expensive – they love the champions, and they love the world champions even more. Stories like this always sell well – even though they merely play on people’s love of wealth and success, and have little relevance in the real world.

  In reality, there are two export champions -China and Germany. Both supply the rest of the world with their products – and they do each other no harm in the process.

  Meanwhile, Xinhua reports that, “China might become top world exporter, but weakness remains.“

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  • January 10, 2010 10:36 PM

• $123,000,000,000,000

  

  In Foreign Policy, Robert Fogel makes a prediction about the Chinese economy 30 years down the road:

  In 2040, the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per capita income will hit $85,000, more than double the forecast for the European Union, and also much higher than that of India and Japan. In other words, the average Chinese megacity dweller will be living twice as well as the average Frenchman when China goes from a poor country in 2000 to a superrich country in 2040. Although it will not have overtaken the United States in per capita wealth, according to my forecasts, China’s share of global GDP — 40 percent — will dwarf that of the United States (14 percent) and the European Union (5 percent) 30 years from now. This is what economic hegemony will look like.

  Most accounts of China’s economic ascent offer little but vague or threatening generalities, and they usually grossly underestimate the extent of the rise — and how fast it’s coming. (For instance, a recent study by the Carnegie Endowment for International Peace predicts that by 2050, China’s economy will be just 20 percent larger than that of the United States.) Such accounts fail to fully credit the forces at work behind China’s recent success or understand how those trends will shape the future. Even China’s own economic data in some ways actually underestimate economic outputs.

  Also from Korean paper Chosun.com:

  In 30 years the Chinese economy “will reach US$123 trillion,” writes Robert Fogel, a Nobel laureate in economics and professor at the University of Chicago, in an article in the January issue of Foreign Policy magazine.

  This means China will account for 40 percent of the world’s GDP in 2040, dwarfing the U.S. (14 percent) as the world’s largest economy. “Fogel’s GDP estimate, which is apparently based on purchasing power parity, is remarkable as only a decade ago China’s PPP-based GDP was merely half that of the U.S.

  “China’s per capita income will hit $85,000, more than double the forecast for the European Union” and much higher than that of Japan, although lower than that of the U.S., Fogel forecasts.

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  • January 6, 2010 2:31 PM

• China Expected To Grow 9.5% In 2010

  

  From AFP:

  China is expected to grow by about 9.5 percent in 2010, state media quoted a government think tank as saying Friday, exceeding forecasts made by outside experts for the new year.

  The world’s third-largest economy will be boosted by double-digit growth in real estate investment and mild inflation, the State Council’s Development Research Centre said in a report published in the China Economic Times.

  “In 2010, the external environment will remain rather grim but it will not deteriorate further,” Zhang Liqun, a macroeconomist at the centre, said in the report.

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  • January 1, 2010 4:31 PM

• China Raises GDP Growth Estimates, Narrowing Gap With Japan

  

  From Bloomberg:

  China raised its 2008 growth estimate to 9.6 percent from 9 percent and said this year’s quarterly figures will increase, narrowing the gap with Japan, the world’s second-biggest economy.

  Gross domestic product was 31.405 trillion yuan ($4.6 trillion) last year, the statistics bureau said at a briefing in Beijing today. That compares with a previous 30.067 trillion yuan and the World Bank’s estimate of $4.9 trillion for Japan.

  China’s expansion will be more than 8 percent in 2009, according to government officials, and the nation is poised to overtake Japan next year, International Monetary Fund projections show. Today’s figures result from an economic census which showed a bigger contribution from services and continue a pattern of China revising up preliminary growth estimates.

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  • December 25, 2009 5:44 PM

• China’s GDP May Surge 12% on Rebound in Exports

  

  From Bloomberg:

  China’s growth may surge to as much as 12 percent next year, increasing the risk from inflation unless the government raises interest rates, according to Citic Securities Co., the nation’s biggest listed brokerage.

  The economy may be boosted by a rebound in exports and domestic spending next year, said Zhu Jianfang, chief economist at the Beijing-based brokerage. He expects the benchmark lending rate to increase by between 27 basis points and 54 basis points from 5.31 percent. A basis point is 0.01 percentage point.

  “We will see a change in monetary policy next year, otherwise, the growth will reach 12 percent, which will be a bit too fast,” Zhu said in an interview after his presentation at a forum in Shanghai.

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  • December 23, 2009 6:44 AM

• The China Bubble

  

  In Forbes, Gady Epstein writes that “a fast-growing pile of dicey debt” is responsible for China’s surging economy, but the bubble may soon burst:

  Signs of the times: government bureaucracies funding themselves by foisting debt on state-owned business enterprises; local governments raising capital by selling land at sky-high prices to corporations they own; and a People’s Bank of China lavishing liquidity on the entire system in a way that makes Federal Reserve Chairman Ben Bernanke look downright stingy.

  “It’s a Ponzi scheme whose head is the central bank, and it can print money,” says Victor Shih, a China expert at Northwestern University.

  The U.S. government’s $7.2 trillion in debt at the end of June represented 50% of gross domestic product. The Chinese government’s officially disclosed $840 billion in public debt represents less than 20% of GDP. But the People’s Bank of China and the treasury are also on the hook for potentially $1.5 trillion in off-balance-sheet debt owed by cities and provinces and entities they control. They’re also implicitly obliged to backstop $1 trillion, both in loans that “policy banks” were directed to issue, even when they made no economic sense, and nonperforming loans that the government removed from the books of state-owned commercial banks over the past decade.

  Add it up and the national government is responsible for debt equal to over 70% of 2009 GDP. That doesn’t count any loans generated this year that might go sour amid a 30% increase in debt balances nationwide.

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  • December 14, 2009 9:27 PM

• China Will Sustain Growth Rebound, Central Bank Says

  

  Thanks to its generous stimulus package and growth in loans, China’s financial forecast is generally positive. From Bloomberg:

  China will sustain its economic rebound this quarter and growth is likely to top the government’s 8 percent target for 2009, the central bank said.

  Policy makers need to “manage inflation expectations,” curb excess capacity and encourage sustainable lending growth, the central bank said in a report on the third-quarter economy, posted on its Web site today.

  China’s economic acceleration and faster-than-estimated growth in the U.S. may help to extend this year’s global rally in stocks. Today’s comments contrast with the central bank’s July report, which described the world’s third-biggest economy as being in a “critical” phase and facing many uncertainties.

  “The central bank is clearly more confident,” said Xing Ziqiang, an economist at China International Capital Corp. in Beijing. “China’s economic growth will continue to rebound in the coming quarters.”

  News on the yuan, from Reuters:

  China will continue to pursue currency reforms despite having adopted a special policy to maintain yuan stability to cope with the global financial crisis, central bank governor Zhou Xiaochuan said on Friday.

  He added that the yuan should eventually achieve a certain international status, although this would be a gradual process.

  China revalued its currency against the dollar in 2005 and allowed it to steadily appreciate until the middle of last year, but then began using its system of daily reference rates to establish a virtual peg against the U.S. currency to help cushion its economy against the impact of the global financial crisis.

  “We have decided on a yuan reform path, but at the same time we can take a special approach during times of crisis,” Zhou said in a speech.

  The spot yuan rate against the dollar has held steady since July 2008, but growing confidence in the economic recovery has recently stoked expectations that the yuan may soon begin to appreciate once more.

  For more recent news on the Chinese economy, see a series by Elizabeth Lynch at China Law & Policy.

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  • October 30, 2009 10:40 PM

• China’s Rivers of Cash Flowing Wrong Way

  

  The Sydney Morning Herald interviews economist Huang Yasheng about China’s dramatic economic growth and why rising government expenditures are not helping the people:

  “Maybe they should declare a moratorium on production for a year and pay peasants to walk around for a year, exercise, without adding to supply,” he says.

  But the politics seem to demand that the state spends an ever-increasing share on what China least needs. ”It’s all absolutely the same: building absolutely wasteful buildings, more opera houses, more Terminal 3’s [Beijing's new airport] and CCTV towers. These buildings would never have been built in the ’80s, not because China was poor but because the government was poor. Now the view is that ‘anything we do increases GDP, so what’s the problem’?”

  The worsening of China’s already sizeable problems of inequality, corruption and economic imbalances over the years has caused Huang to question whether the political system is capable of welfare-enhancing economic reform. Like many China watchers, he is coming to the view that the answer might be no.

  So why does the self-interest of China’s bureaucracy and state-controlled monopolies appear to trump all else?

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  • October 25, 2009 8:54 PM

• China’s Economy: Not Yet Mission Accomplished

  

  From Time:

  Since the global financial crisis hit last year, Chinese officials have been firm about the need to maintain about 8% economic growth to ensure stability. Before the last office door swung shut at Lehman Brothers in New York, Beijing was planning how to get there, eventually unleashing a massive $586 billion stimulus package in the spring and freeing up lending to allow billions more to slosh into the economy. With this week’s announcement that GDP had expanded by 8.9% in the third quarter, China is well on its way to reaching its target for the year. That will make China the first major economy to emerge from the slowdown. But it is far too soon for the country’s economic mandarins to hang a “Mission Accomplished” banner.

  “While we have avoided the worst recession since the Great Depression, we are probably heading for another asset bubble and more financial turbulence,” Qin Xiao, chairman of China Merchants Group, wrote in Thursday’s Financial Times. Qin said he didn’t think “a quick, steep bounce driven by fiscal fixed investment is a good thing for China,” adding that the current loose monetary policy should shift to neutral. On Thursday, Hong Kong’s Hang Seng Index dropped by 0.5% and the Shanghai Composite Index fell 0.6% on concerns that China would begin to tighten monetary policy in response to fears of expanding bubbles in real estate and financial markets.

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  • October 25, 2009 4:27 PM

• China Growth More Than 7 Pct In January-September

  

  From AP:

  China’s economy expanded more than 7 percent in the first nine months of the year and will certainly surpass the 2009 growth target of 8 percent, a top economic official said Monday.

  China is due to release official third quarter economic data on Thursday. But in a briefing Monday in Beijing, Xiong Bilin, a top economic planner, told reporters the growth rate for January-September would be a bit above 7 percent.

  “Achieving a growth rate of 8 percent for the year is basically no problem,” Xiong, a deputy director of the National Development and Reform Commission, told reporters.

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  • October 20, 2009 6:46 AM

• Stephen Roach: Is China Ready To Lead Global Economy?

  

  NPR’s Morning Edition interviews author Stephen Roach about his new book, Next Asia: Opportunities and Challenges for a New Globalization, which looks at the challenges China faces in its quest to become a global leader in economic growth:

  China appears to be emerging from the global recession faster than the rest of the world, including the U.S. The conventional wisdom among economists is that the U.S. will “pass the baton” to China, as the world’s No. 1 engine of economic growth.

  But that won’t happen so fast, author Stephen Roach tells NPR’s Linda Wertheimer. Roach is the former chief global economist for investment bank Morgan Stanley, and now chairman of Morgan Stanley Asia.

  Listen to the full interview here.

  The NPR post also includes an excerpt from Roach’s book.

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  • September 25, 2009 10:30 AM

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