Korean Job Discussion Forums

[mack4289]

So can newspapers start putting some kind of disclaimer in any article about China's economic growth? I've read a lot about China's massive growth, so why is this the first time I've read this?

http://www.nytimes.com/2007/08/19/business/yourmoney/19view.html?_r=1&ref=business&oref=slogin

"The G.D.P. in China has been growing somewhere between 4.5 percent (using the average for a rapidly growing country) to 6 percent a year (using the highest rate for Japan), not at the 10 percent rate claimed in official statistics.

..... CHINA claims that its economy is growing at 10 to 11 percent a year, and China�s official analysts say that their nation will catch up with the United States long before the 22nd century arrives. Don�t believe it.

First, let�s deal with the implausibility of the official Chinese statistics. Mathematically, if the overall economy were to grow 10 percent annually, and the 70 percent of the economy that is based in rural areas were not growing (as stated by the Chinese government), the economy in China�s cities would have to be growing by 33 percent a year. The urban economy is growing rapidly, but not at a 33 percent pace.

Furthermore, Chinese statistics conflict with those of Hong Kong, the semiautonomous territory that serves as the financial capital of much of southern China. In 2001, Hong Kong had a recession, which is to say that it reported that its gross domestic product fell. Guangdong, the adjacent Chinese province, has a population of around 200 million. In 2001, it reported that its G.D.P. grew by 10 percent. What are the chances that both of those numbers are correct? Very slim.

Economic growth rates can be inferred from electricity consumption. In every country in the world, electricity use has generally grown faster than the G.D.P. Electricity is necessary for nearly all productive activities, and because of inefficiencies, consumption of electricity has generally outstripped economic growth. Rising energy costs have resulted in more efficient use of electricity, but especially in the developing world, economic growth has still generally lagged growth in electricity.

But if China�s official numbers are to be believed, there are provinces in China where the G.D.P. has been growing faster than energy use. That is unlikely, since the central government�s statistics also say that energy use per unit of G.D.P. is going up � not down, as claimed in provincial G.D.P. statistics.

Among the world�s 12 most rapidly growing economies over the last 10 years, the G.D.P. has grown only 45 percent as fast as electricity consumption. In the early 1970s, Japan was shutting down its electricity-guzzling aluminum industry. During this period, the G.D.P. grew 60 percent as fast as electricity consumption, the highest recorded level among industrialized nations."

The imaginary growth, the contaminated exports (imagine what the stuff they sell in the country is like), rising inflation (http://www.iht.com/articles/2007/08/21/business/yuan.php) and its stock market is still rising. (http://www.iht.com/articles/ap/2007/08/22/business/AS-FIN-MKT-China-Markets.php) What's going to be worse: the subprime bubble or the Chinese bubble?