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The outlook for China

Jeegar Kakkad June 22, 2009 12:53

If you're looking for insights on the state of the Chinese economy, look no further than Brad Setser's Follow the Money blog.

His most recent post on China looks at the good and bad news on China's economy.

The good news?

The Chinese economy is growing (government spending will account for 6 percentage points of the 7.2% forecast growth) and its economy is rebalancing (China needs less savings and more domestic consumption).

The bad news?

It's not clear whether or not this growth is sustainable. Imports are picking up, but rather than feeding demand for capital goods (which would benefit UK manufacturers), the Chinese are simply stocking up on relatively cheap commodities. That means China's growth isn't necessarily driving a global turnaround.

 

Tags:

Growth

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