Will China Lead the Global Economy to Recovery?

Share the joy

New English word? Translate any word using double click.




By Lisa Gan
Ads by Google
Chinese Economic Collapse Corruption, Manipulation, Bad Loans Is The China Bubble About To Burst?
Liverpool Buy to Let Apts 25% BMV, £20K Instant Equity Plus 10% NET Annual Rental Guarantee.
#1 China Wholesale Store Wholesale 1000’s of Items from 120,000 Verified Sellers.©2004-2012
Expert Author Lisa Gan

With a GDP of $3.78 trillion in 2008 and an impressive growth rate of 7.9% in the second quarter of 2009, not only has China managed to avoid recession, it has ironically profited from a downturn in the global economy, becoming America’s biggest creditor. The $586 billion government stimulus package that was pumped into the Chinese economy has driven consumer demand and stimulated investment, without relying on quantitative easing or dipping into substantial deficits. China, unlike the US, will not have to endure a future generation burdened by debt and high taxes. Although unable to compete in terms of GDP per capita and technological innovation against nations in the West, China has undeniable potential for exponential growth in the next few decades, particularly when armed with a population of 1.3 billion people.

The Wall Street Journal reported: “… hopes of a world-wide economic recovery increasingly centre on continued growth in the developing world, and China in particular”

However, as critics are quick to point out, will this optimistic growth be sustainable? Few have doubted China’s ability to stimulate the economy to achieve short-term growth, but such a recovery cannot be independent to the condition of the US economy. The longer the delay in the road to recovery for the West, the more ineffective the stimulus in China will be on the global economy. This is because employment of migrant workers is highly dependent on export demand, which has dramatically fallen as the financial crisis took a turn for the worse in the US and Europe. Unfortunately, China’s astonishing GDP growth is uncorrelated with matching employment growth. Yet China’s governors are reluctant to change this type of export-led expansion because such a growth model has facilitated the massive inflow of foreign capital investment, proliferating monopoly profits and rent-seeking opportunities. Indeed, there have been heavy criticisms of China’s ruthless attempts to achieve superpower status while half of its populace live below the poverty line, under a corrupt political system that subordinates social welfare of ordinary citizens in favour of military and economic prowess.

Another topical issue that has fixated a frown on President Hu’s face is the dilemma concerning the environment and climate change. After 20 years of uncontrolled economic development, officials can no longer ignore the smog of chronic air pollution that has become a familiar sight in China’s most industrialised metropolises. About 70% of China’s electricity supply comes from coal-fired power stations. The question is, how fast will China be able to adopt greener technologies? Radical action has been taken in order to tackle ubiquitous respiratory diseases, including the closure of factories that pollute heavily and a total ban on leaded petrol for cars. It is a positive sign that sustainable climate change legislation has been a priority for the Chinese government, with a looming Copenhagen conference, which will take place in December 2009.

However, implementation of tougher environmental policies can be politically suicidal for decision-making officials who advocate the preservation of the environment at the cost of imminent job losses. Furthermore, a penchant for Western-style consumerism is emerging among the Chinese population. There exists an inescapable trade off between inordinate extravagance and blue skies filled with clean air. President Hu will have to be pragmatic in his approach to implement carbon emission cuts without upsetting influential interest groups. The decision of whether domestic or global interests take priority will not be easy.

“Basically they have the choice of putting people on the streets or letting the pollution continue” – Economic Consultant, North China

By 2030, China’s current toddler middle class will stride into maturity. There are suggestions that the Chinese economy will be double the size of America’s, at current exchange rates, as early as 2050. A pressing question is, will significant political change follow? For a nation that censors the media, imprisons opponents of the Communist Party, and curbs civil liberties, the move towards a liberal democracy will be a big and challenging step. Yet the scene is set for change, be it slow. Property rights institutions are developing and new human rights policies are embryonic. Nevertheless, elitist central leadership will not be keen to compromise with localities, even less with foreign powers. Mr Hu’s relationship with Mr Obama has been tension-filled at best. Unsurprising, given the constraint of fundamental ideological differences. As for the future of the global economy, a clearer picture will only emerge with time.

For more economics discussion: lisagan.com

Your Comment is Valuable, Social Comment For Free &
One Advertising Comment For .5$ Only !
Note: 10 Websites in one comment as Maximum, Please Write Your
Site Name At Your Guest Name Box At Comments Fill out That Matches
the One in The Descriptions Of Your Order Summary. Kindly, No Porn,
No Alcohol Related, No Gambling, Neither Does Sindybakur.com Nor
Its Employees Accept Religious or Political related Comments.
Further, Comment will appear for One Month. Please be
informed that Any Violation Of These Rules Would
Result In Funds Disclaim and Comment
Deletion, Good Luck & Thank You .

More Than One Ad Comment OR Donation to
Stimulate this Site’s Staff, Thank You .

Share the joy


  1. 3 in 1 car seat says:

    You’re so interesting! I do not think I have read a single thing like that before. So great to find somebody with a few genuine thoughts on this topic. Really.. thanks for starting this up. This website is something that is required on the web, someone with some originality!