Give credit where it’s due. Ever since China’s government pursued vigorous reforms 35 years ago, the country’s economic growth rate has been simply remarkable.#-ad_banner-# According to the World Bank, roughly half a billion Chinese people have been lifted out of poverty, and the economy is now 90 times larger than it was back in 1978. Rumors of the imminent demise for this growth machine in recent years have been clearly premature. I noted these concerns more than two years ago, as have noted short seller Jim Chanos and others, and the Chinese economy has still managed… Read More
Give credit where it’s due. Ever since China’s government pursued vigorous reforms 35 years ago, the country’s economic growth rate has been simply remarkable.#-ad_banner-# According to the World Bank, roughly half a billion Chinese people have been lifted out of poverty, and the economy is now 90 times larger than it was back in 1978. Rumors of the imminent demise for this growth machine in recent years have been clearly premature. I noted these concerns more than two years ago, as have noted short seller Jim Chanos and others, and the Chinese economy has still managed to grow more than 7% annually. In fact, the Chinese government believes that this economy will grow an impressive 7.5% in 2014 as well, which would still be the most impressive growth rate in the world. Trouble is, recent signs point to decelerating growth, perhaps closer to 5%, which would create a drag for the dozens of economies that consider China to be their major trading partner. The trouble spots include local government debt, an increasingly uncompetitive wage structure and a tricky set of adjustments that the government is making to shift toward domestic consumption. Document 107… Read More