China’s economy on the way up

Picture: Dan Green/2012

In a piece earlier this week, I argued that the recent decisions to add import duties to solar power products from China and the blocking of Huawei/ZTE from certain operations were signs that the US was struggling to compete with its rising competitor. In a world of divided opinion regarding China’s trajectory, these moves indicated that the US feels it needs to bend the rules to remain competitive.

Since then, several announcements have appeared that further support this perspective.

First, the IMF dismissed the notion of a crash for the Chinese economy, regardless of the continuing problems in its main export markets. As Anoop Singh, director of the Asia and Pacific department, put it:

China is not having a hard landing. The numbers are clearly recognising that China will grow this year

Then came the announcement earlier today that Chinese exports in September had grown much more than expected – by 9.9% year on year. According to Bank of America Merrill Lynch economists Ting Lu and Marcella Chow, quoted in the South China Morning Post, the outlook remained cautious,but

Markets will surely welcome these robust trade data, which could further dispel the fear of a hard landing

The continued strength of the Chinese economy is likely the result of various stimulus methods undertaken by Beijing since 2008. Standing in stark contrast to the failing austerity project in Europe and the UK, this included setting infrastructure targets for local governments totalling 4tn yuan.

Whether or not this growth can be sustained remains to be seen.

One thought on “China’s economy on the way up

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