China Economy Is Powering The World
The question of how much the China economy is growing is an important one for the entire globe. Because all our economies are global now, changes in one will necessarily affect the others. China stocks are going up.
The GDP in China is experiencing a growth rate of about 10% annually. One concern about the growth is that, as China buys up natural resources, it may hurt other countries by limiting their access. In any case, controlling natural resources always has global influence.
It is easy to throw out statistics such as a 10% growth rate. But one number never tells you the whole story. Another number to consider is that the ratio of the Chinese government debt to its GDP is a mere 20%. In the U. S., this ratio is over 60%. When you consider the debt ratio along with the growth in GDP, it makes the Chinese economy appear stronger.
The growth in the economy in China does come with some concerns. For example, it could create the same kind of bubble that has been experienced in the West. With money flooding the economy, inflation may rise, and consumers may start spending beyond their means and overextending themselves on credit. The result could well be the economic crisis currently experienced, especially in America.
There is also concern over the market for Chinese goods. The downturn in the Western economy has resulted in fewer imports from China. China will not be able to continue to grow at its current rate without a viable marketplace for its products.
For America, this is a good thing because China holds more American debt than any other nation. If China chose to sell their American bonds, the effect would be disastrous. However, as this would also spell disaster for Chinese exporting, this is unlikely to occur.
Suffice it to say that, at present, the China economy is growing and will likely continue to do so. For how long it can continue is going to depend, at least partially, on the global economy. - 23229
The GDP in China is experiencing a growth rate of about 10% annually. One concern about the growth is that, as China buys up natural resources, it may hurt other countries by limiting their access. In any case, controlling natural resources always has global influence.
It is easy to throw out statistics such as a 10% growth rate. But one number never tells you the whole story. Another number to consider is that the ratio of the Chinese government debt to its GDP is a mere 20%. In the U. S., this ratio is over 60%. When you consider the debt ratio along with the growth in GDP, it makes the Chinese economy appear stronger.
The growth in the economy in China does come with some concerns. For example, it could create the same kind of bubble that has been experienced in the West. With money flooding the economy, inflation may rise, and consumers may start spending beyond their means and overextending themselves on credit. The result could well be the economic crisis currently experienced, especially in America.
There is also concern over the market for Chinese goods. The downturn in the Western economy has resulted in fewer imports from China. China will not be able to continue to grow at its current rate without a viable marketplace for its products.
For America, this is a good thing because China holds more American debt than any other nation. If China chose to sell their American bonds, the effect would be disastrous. However, as this would also spell disaster for Chinese exporting, this is unlikely to occur.
Suffice it to say that, at present, the China economy is growing and will likely continue to do so. For how long it can continue is going to depend, at least partially, on the global economy. - 23229
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posted by X - Men @ 11:19 AM
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