Gdp Growth in China
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- Category: Politics: Economics
- Date Submitted: 11/22/2010 07:56 PM
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China's GDP grows 9.6% in Q3, the worldwide economics is recovering.
Xinhua
China daily
09/14/10
In this article, the data sited from the second quarter report of China’s GDP is used as an evidence of global economic recovery.
Review:
Some major economies reported positive growth for the first quarter. In the United States, for example, GDP grew 3.2 percent in the first quarter and 1.6 in the second quarter (1). The International Monetary Fund has posted that the global GDP growth is approaching 4 percent. A lot of positive statistics raise show people a good view that the worldwide economics is recovering. In my opinion, the current recovery is based on government stimulus. United States and England are operating fiscal budget deficits over 10 percent of their GDP. Interest rates around the world are close to zero. Considering the amount of stimulus spending, the recovery is not strong enough. Secondly, overstimulation will eventually lead to inflation; as the result, interest rates will rise again and cause another dip of the global economy. Furthermore, a lot of crucial problems exposed by the crisis are still not resolved. Therefore, the recovery is not sustainable.
The economy is guided by the price system, no matter it is worldwide or a small local market. For instance, the auto industry in China is booming as everyone says. At the same time, automakers are depressed everywhere else around the world. What makes the difference between these two facts? It's true that auto industry is booming in China. This is line with the global industry's trend. In case a country's per capita income rises above US$ 6,000, the auto demand tends to shift downwards. In fact, the growth is not stable.
The auto market in China is new. That means most of the consumers are buying their first car, which will creating a spike in demand. As a substitute, demand for replacement of vehicles will make another the spike in its own demand. On the other hand, for the...
Xinhua
China daily
09/14/10
In this article, the data sited from the second quarter report of China’s GDP is used as an evidence of global economic recovery.
Review:
Some major economies reported positive growth for the first quarter. In the United States, for example, GDP grew 3.2 percent in the first quarter and 1.6 in the second quarter (1). The International Monetary Fund has posted that the global GDP growth is approaching 4 percent. A lot of positive statistics raise show people a good view that the worldwide economics is recovering. In my opinion, the current recovery is based on government stimulus. United States and England are operating fiscal budget deficits over 10 percent of their GDP. Interest rates around the world are close to zero. Considering the amount of stimulus spending, the recovery is not strong enough. Secondly, overstimulation will eventually lead to inflation; as the result, interest rates will rise again and cause another dip of the global economy. Furthermore, a lot of crucial problems exposed by the crisis are still not resolved. Therefore, the recovery is not sustainable.
The economy is guided by the price system, no matter it is worldwide or a small local market. For instance, the auto industry in China is booming as everyone says. At the same time, automakers are depressed everywhere else around the world. What makes the difference between these two facts? It's true that auto industry is booming in China. This is line with the global industry's trend. In case a country's per capita income rises above US$ 6,000, the auto demand tends to shift downwards. In fact, the growth is not stable.
The auto market in China is new. That means most of the consumers are buying their first car, which will creating a spike in demand. As a substitute, demand for replacement of vehicles will make another the spike in its own demand. On the other hand, for the...