Monday, 4 May 2009

China survives recession without a scratch?

A couple of rather remarkable stories suggesting China has suffered relatively little in the current recession and that it survived without a scratch?

How do they define scratch - millions losing their job and high levels of poverty?

China: What world recession? [Salon]

Back when the Asian financial crisis ravaged the world, China surprised nearly everyone by bulldozing through the downturn while suffering hardly a scratch. Could it be possible that the Middle Kingdom is about to repeat that amazing feat, in the face of a much, much worse economic crisis?

Goldman Sachs appears to think so. Last week, Goldman upgraded its estimate of Chinese GDP growth in 2009 from 6 percent to 8.3 percent. Even more astoundingly, the investment bank forecast that GDP growth in 2010 would be back to a robust 10.9 percent.

This article is way off the mark, not least because the recession is far from over. We may even by some way off the bottom. At least William Buiter has been correctly included for balance.

Next we have:

China cashes in on crisis [Asia Times]

The global financial crisis is proving a boon for a resurgent China, which is poised to exert ever greater influence in Southeast Asia.

While drawing neighboring countries back into China's economic orbit has been part of Beijing's strategy for restoring what it sees as the country's rightful place on the global stage, recent months of recession have furnished Beijing with new opportunities to further its leadership ambitions in the region.

This article is closer to the action. China has large surpluses and it has used them fairly well in the recent stimulus package. I am not sure I mean "well". China has spent a lot of money. Other Asian countries have not. There is every possibility that China will be more powerful in the region at the end of all this.

Where the end is, nobody knows.



gnet said...

nice informations, thanks for sharing

Anonymous said...

You make an excellent point. "Scratch" is very much a relative term in China. In proportion to its population, a "scratch" in terms of job losses or idle factory capacity would devastate most other countries. I'm interested in how China's consumer class will end up on the other side of the recession. I know the migrant workers are going to have it somewhat rough for a while, at least until the infrastructure projects really pick up steam, but for the middle class in urban centers, I am curious whether they will start spending and really becoming consumers in the global sense, or if the experience of the recession is going to cause them to keep up high savings rates.

JobSearchNinja said...

Recessions do not only bring about tough times financially. Sadly, they set men against men and raise moral issues that most of us would rather not have to consider.

Anonymous said...

very nice article. i am looking for stock brokers in china. the only site i have found is which has all the stockbrokers listings around the world but they have not yet updated stock brokers for China.

Apostille said...

This is good.