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I found it surprising that 6.6% is "slow" or "strained." Those are numbers akin to a massive boom in the US.
by kevstev 7y ago
I found it surprising that 6.6% is "slow" or "strained." Those are numbers akin to a massive boom in the US.
- hnarn 7y agoAre you surprised that growth is higher in China than in the US?
- tonyedgecombe 7y agoI don’t think the article is taking about the whole of China, just Schenzhen.
- ryanhuff 7y agoI believe the point of the parent is that the “slow” growth referenced in the article doesn’t really seem slow by other standards.
- Mirioron 7y agoI find this surprising. It seems obvious to me that areas in countries that are much less wealthy grow much faster than wealthy countries (if they're improving). They are essentially catching up by implementing many of the same techniques wealthy countries already figured out.
- kevstev 7y agoNo, but I am surprised that 6.6% growth is a cause of concern, even if it is lower than whatever the previous number may have been. The last time we saw growth rates above 5% in the US was during the .com boom and even in the midst of it that was considered unsustainable long term.
- lotsofpulp 7y agoAny difference in between growth and expected growth can be a problem. If investments were made and money was lent assuming 12% growth, then 6% is going to hurt.
- Waterluvian 7y agoYou can't compare US and Chinese growth rates. It's easier to grow when you still have a lot of growing to do.
- onlyrealcuzzo 7y agoAlso when your non-farms workforce participation is increasing, instead of flat or decreasing. Most of GDP growth comes from 1) population growth, 2) inflation, and 3) non-farms workforce participation.
- lefstathiou 7y agoI believe the issue is that China has tens of millions of people migrating to cities from the country side so it is critical the economy grows to absorb and create jobs for them. So for example, if the population of a city grows at 9% and the economy grows at 6% your unemployment rate could grow by 3% and that’s not good (being simplistic here). Also inflationary issues could start to kick in as the price of goods may rise at a faster rate.
- at-fates-hands 7y agoIts the slowest rate in 30+ years. First quarter was 6.4% Second quarter was 6.2% Third quarter was 6% This is because the “quality” of China’s growth is, to use a technical term, kinda lousy. The way China measures growth and sets GDP targets encourages investment in projects that will never be profitable enough to cover initial costs. Short-term GDP growth trumps long-term GDP growth. The Chinese government has long defied this economic logic. Since many of its investments aren’t profitable, the money to fund new economic activity comes instead via credit from state-run banks and, in the past, through shadow finance (loans made off bank balance sheets). It achieves this in part by controlling banks, though also through setting GDP targets that tell local government officials how much they must invest to earn promotions. (The 2019 target, by the way, is 6-6.5%, so it just barely made it last quarter.) In short their economic numbers tend to be a lot of smoke and mirrors. https://qz.com/1730848/good-news-chinas-gdp-growth-has-hit-a-30-year-low/ https://qz.com/1730848/good-news-chinas-gdp-growth-has-hit-a...