In this article from CNN, China looks set to report its worst quarterly growth since the financial crisis. The article includes a graph of China's declining GDP to depict the slowing growth. It is expected that China will take stimulus action if the economy slows much more, in light of the risks the economy is facing, such as a waning property sector, capital outflow, and local government debt. What I found most interesting here was the comments below the article, comparing this "lack of growth" to the US and if this "slowed growth" is really meaningful.
In another article from WSJ, it's reported that China is undoubtedly slowing with trade statistics dropping. Again, this article expresses that this isn't the sign of an apocalypse, given that China's trade stats are notoriously volatile. WSJ says this news isn't so dreary.
Between these two articles, it's apparent that China is slowing. Do you agree that this slowness is not detrimental and China will be fine? Or, do you foresee a more dramatic outcome for China as a result of this reported slowness?
These are interesting articles because they bring up an interesting idea of whether China is experiencing an economic growth drop off similar to the US during the past recession. I have to disagree that this slowed growth will not have an effect on China as we move forward. I see it slowing even further, but do not see an "apocalyptic" drop off and in the future China will recover their growth and be fine.
ReplyDeleteBased off the Martin Wolf book, I think stimulus would be the way to go. I do not think trade volatility is solely the reason for slowing GDP considering this isn't the first time it has happened. Getting some capital into the economy and lowering interest rates would increase spending and hopefully get the GDP to increase.
ReplyDeleteI agree with Nolan. Wolf really talks about the need for China to make a soft landing or else face financial crisis which would undoubtedly impact the global economy due to the number of exports received from China.The slowing of China's economy has been slowing steadily overtime and therefore needs to be addressed before it bottoms out.
ReplyDeleteI think that stimulus certainly is an option, but I think that China has been growing at such an astronomical rate, that it isn't going to hurt them too much if they experience some slowed growth. It would seem to be expected that their growth is going to slow at some point...they can't continue to growth this quickly forever.
ReplyDeleteI agree that some stimulus options may be a viable option for China. Something small to put some liquidity in the market. But I don't think anything major is necessary. As stated above, China's economy can't continue to grow at an astronomical rate forever, some slowing down was going to have to happen at some point.
ReplyDeleteChinese growth has been slowing down since 2010, and it might be though for Chinese rulers. The slowness might have an effect on the country, but I believe it will not be too dramatic. Hopefully the Chinese government and the policy makers will find a way to increase spending and reduce investment in order to increase the GDP.
ReplyDeleteI agree with both Aleks in that the Chinese economy has been growing at such a high rate and has been somewhat volatile in the past that it may be beneficial for the country to have a slightly slower growth rate that can be sustained. Given that, it would be important for China to have a "soft landing" as Wolf states in the book. A slower growth rate may not be detrimental to the economy as stated in the WSJ article but a quick bottoming out of the economy would most likely have negative effects.
ReplyDeleteI also would have to disagree this slowed economy will be the downfall of China. Although in recent years the economy has slowed, it is still amazing that even with the slowed growth rate, the country is still growing 2-3 times faster than most countries. Moving forward I do believe China should become less dependent on its exports for sustainable growth and rely more on innovating and stimulating the economy within the walls of China.
ReplyDeleteI agree with the previous comments. I think that it is inevitable for a country experiences slow growth rate and, that there should not be as much of a panic. I do agree that there should be some sort of stimulus can be used in order to generate growth as well as it is important China has some sort of 'soft landing'. I am curious as to whether there is an almost over hyping of China's current slow growth rate. It makes me think of the concept of speculative attack and, how if even a doubt about the future of the Chinese economy or growth rate is created, that it may impact how safe people view their economy and, it may possibly cause doubt in their safeness level.
ReplyDeleteAs one of the world's largest economies, I think that China should be able to recover from this slowdown with stimulus, but I don't see it getting back to the level of rapid growth that Wolf described in Chapter 3. I think that the most important thing China should address is making its growth rate more stable.
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