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 Chinese economy, in terms of its GDP, is said to be growing at a rate of around 10% a year. There is some concern that this growth comes at the expense of other countries in the world because it is buying up all the available natural resources possible. This ability to buy up whatever it needs has influence on a global level.
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 current concern for China is that the rising economy will cause some of the same problems that we have seen in the West. That is, that consumers will end up over extending themselves in credit and buying beyond their means, thus creating a bubble. This could potentially end in the same kind of economic disaster that is currently being experienced elsewhere, especially in the United States.
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.
For now, one can definitely say that the China economy is growing and shows no signs of stopping. How long the growth can continue will be partially dependent on the strength of the global economy as well. - 23167
The Chinese economy, in terms of its GDP, is said to be growing at a rate of around 10% a year. There is some concern that this growth comes at the expense of other countries in the world because it is buying up all the available natural resources possible. This ability to buy up whatever it needs has influence on a global level.
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 current concern for China is that the rising economy will cause some of the same problems that we have seen in the West. That is, that consumers will end up over extending themselves in credit and buying beyond their means, thus creating a bubble. This could potentially end in the same kind of economic disaster that is currently being experienced elsewhere, especially in the United States.
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.
For now, one can definitely say that the China economy is growing and shows no signs of stopping. How long the growth can continue will be partially dependent on the strength of the global economy as well. - 23167
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posted by X - Men @ 2:46 AM
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