China’s Economic Growth: Grounds for Skepticism?
China’s economic growth topped 11 percent in the first quarter, which is pretty darn fast. For comparison, we think that long-run U.S. growth is about 3 percent. (Both figures are inflation adjusted.)
There are skeptics. Macroblog has a good commentary on some of the limitations involved.
I’m preparing an in-depth commentary for a future issue of the Businomics Audio Magazine. The gist of my current thinking is that China’s growth will continue for some time, but long before they surpass the U.S. or European economies, they’ll be constrained by a wide variety of institutional limitations.
Comments
This should not be skepticism, but rather surety that there will be a recession. The time and place is yet to be determined but I would be slow to buy into the market until the first Great China Banking crisis occurs. It will be a second Asian market crisis, just watch and see. That is a sure promise… it comes with development in EVERY nation. Every nation which is developing has its own wake up call for their banking system which ultimately translates into a serious recession. Everyone wants to go to heaven but no one wants to die.
Respectfully,
Michael Corley