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Both China and India have attracted global attention for rapid growth, but their growth patterns are very different (Rajan 2006, Pack 2008, Bosworth and Maertens 2010). China took the conventional route of manufacturing-led growth and is recognised as a global leader in manufactured exports. India followed the unconventional route of service-led growth and has acquired a global reputation for service exports. Are their growth patterns converging? Is China catching up in services?
Are China and India converging? | vox - Research-based policy analysis and commentary from leading economists
Revised Comment Policy Commenters must provide an e-mail address. This change is meant to fend off spam comments from advertisers. These have become more and more of a problem over time.
Is China's Economy Unraveling? - Decline of the Empire
If China’s Property Bubble Bursts | The Diplomat
The cooling of China’s real estate sector is good for the economy. But the government is right to be worried about the social consequences of the bubble bursting. In October, Beijing announced that four city and provincial governments – Shanghai, Shenzhen, Zhejiang and Guangdong – would be allowed to start issuing bonds for the first time in China’s history.The will-they, won't-they argument over the sustainability of China's capex-driven growth and the transition from an investment-led/high-growth economy to a consumption-driven/lower-growth model is becoming more polarized every day. Pivot Capital Management's take on the slowing growth and muddling transition will make the shift more painful and will likely lead to a credit bust. Their thesis focuses on the balance sheet transformation of the Chinese economy that has attempted to postpone such a transition at a time when the pro-cyclical shadow of global growth expectations demand it. They expound on three main reasons for the proximity of credit bust in China: shadow banking pushing credit expansion to the edge of a crisis (as the regulated markets lose control), real estate and infrastructure investment are at a critical juncture (as worsening fundamentals significantly dampen flows), and interdependence in China's financial system .
Pivot Capital On China's Investment Boom (And Pending Bust) | ZeroHedge
Oct. 4 (Bloomberg) -- China’s rise to global prominence has long preoccupied the leaders of the developed world. They should be more concerned about what happens if the country’s growth falters. With its combination of cheap labor, easy money, undervalued currency, heavy investment in manufacturing and focus on exports, the nation of 1.3 billion has built an impressive economic engine.
China’s Fall, Not Its Rise, Is the Real Global Threat: View - Businessweek
It's becoming clear that China won't bail out Europe , simply because it sees no political will and has no desire to buy more Western debt. Same will apply to US as things get worse. What China will buy is access to stuff it truly wants: resources and management talent. So, as the cited FT story makes clear, China is ready to invest in Brazil's new offshore hydrocarbon discoveries. And as the Center for America-China Partnership made clear in our grand strategy agreement , China is interested in buying into US companies.
Thomas P.M. Barnett's Globlogization - Blog - China will spend where it can own
IT IS perhaps a measure of America’s resilience as an economic power that its demise is so often foretold. In 1956 the Russians politely informed Westerners that “history is on our side. We will bury you.” In the 1980s history seemed to side instead with Japan.
Economics focus: The celestial economy | The Economist
Thomas P.M. Barnett's Globlogization - Blog - China's slows but still grows, thanks to regional "gravity"
Convergence is a take on the healing of the "great divergence" that began around 1800: West grows 1200% over two next centuries while the rest lost 50% (much due to colonialization). The "great convergence," as many call it, predicts that the West grows 600% this century while the rest grow 1200%. Doesn't eliminate difference, but closes gap mightily. Demography, in Subramanian's take, is all about heft: China is 4X size of US so only needs 1/4 GDP per capita to outpace.
Image by DavidDennisPhotos.com via Flickr About 85% of Liaoning province’s 184 financing companies defaulted on debt service payments in 2010 according to a report from the province’s Audit Office. The report also noted that 120 of these borrowers, de facto government agencies, operated at a loss last year.
How Can China Save Europe When It's Defaulting On Its Own Debt? - Forbes
On Wednesday night, after the Chinese markets closed, the People’s Bank of China announced that it had cut the minimum reserve requirement by 50 basis points to 21% for the large banks, and lower for the smaller banks. With the announcement coming just hours before announcements by the Fed, the ECB and the central banks of the UK, Switzerland, Japan and Canada, that they would jointly lower interest rates on dollar liquidity swaps to make it cheaper for banks around the world to trade in dollars, it seemed like world’s major central banks were determined to stimulate global credit growth. But the PBoC move is qualitatively different from that of the others. I think it is important to remember that changes in the minimum reserve requirements in China have more to do with managing the changes in underlying liquidity caused by net inflows and outflows to China than they have to do with changes in credit. At any rate here is the Xinhua article on the subject:
China’s capital flight - macrobusiness.com.au | macrobusiness.com.au
China may be famous as the workshop of the world, but one Hong Kong lingerie- maker has found Thailand a more alluring destination, as companies shift production to cheaper countries. Top Form International, which supplies companies such as Walmart from its south China factories, has been forced to face a new reality in China as workers demand higher wages. Sitting in his Hong Kong office across the border from Guangdong province, Michael Austin, Top Form’s chief financial officer, says the company is seeing wage increases of 20 per cent every year. “China’s policy is double wages in five years. We expect it to be shorter than that.”
China’s rivals gain as factory wages soar - FT中文网
Yesterday, China’s National Bureau of Statistics issued the official economic figures for the 3rd Quarter of 2011. The headline number, year-on-year GDP growth, came in at 9.1%, down steadily from 9.5% in the 2nd Quarter and 9.7% in the 1st. That morning, I went on Bloomberg TV to offer my perspective on what these numbers may mean. You can watch my interview here .