China and its predictable economy

Last updated on Aug 22, 2009

Posted on Aug 22, 2009

Chinese economy has an advantage.  It can grow the way it wants.  By definition they decide on their economic growth.  That’s a very comfortable position….which unfortunately US or India etc. dont have.  Here is why:

China’s 8 percent output growth target will be met because China’s economic statistics are based on recorded production activity, rather than being a measure of expenditure growth—defined as the sum of consumption, investment, government spending, and net exports—as U.S. data are.  The U.S. stimulus package, for example, attempts to boost GDP by undertaking measures that will boost consumption, investment, and government spending. China, however, decrees measures that will generate recorded increases in production spending.

If you dictate the definitions of economic variables, then is it any surprise that you meet every benchmark?  You have to!

How long such Deception can continue is the question.  When SUCH a house of cards falls, then the tremors are far more devastating than what we are witnessing now.

Reference Links:

1. China’s Bogus Boom

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