The question of how much the China economy is growing is an important one for the entire globe. Because all our economies are global now, changes in one will necessarily affect the others. China stocks are going up.
The GDP of China is increasing at a rate of 10% per year. Along with this growth, China has been buying up all the natural resources it can. There is concern that this is hurting other countries by limiting available resources. In any case, control of natural resources has always heavily influenced the global economy.
When considering the strength of a particular economy, one measure is not enough. In the case of China, you can also look at the ratio of government debt to that growing GDP. For China, this ratio is only 20%. Especially when you compare this to the same ratio in the U. S. Which is 60%, you can appreciate how much stronger this makes the Chinese economy.
The growth in the economy in China does come with some concerns. For example, it could create the same kind of bubble that has been experienced in the West. With money flooding the economy, inflation may rise, and consumers may start spending beyond their means and overextending themselves on credit. The result could well be the economic crisis currently experienced, especially in America.
There is also concern over the market for Chinese goods. The downturn in the Western economy has resulted in fewer imports from China. China will not be able to continue to grow at its current rate without a viable marketplace for its products.
For America, this is a good thing because China holds more American debt than any other nation. If China chose to sell their American bonds, the effect would be disastrous. However, as this would also spell disaster for Chinese exporting, this is unlikely to occur.
Suffice it to say that, at present, the China economy is growing and will likely continue to do so. For how long it can continue is going to depend, at least partially, on the global economy. - 23309
The GDP of China is increasing at a rate of 10% per year. Along with this growth, China has been buying up all the natural resources it can. There is concern that this is hurting other countries by limiting available resources. In any case, control of natural resources has always heavily influenced the global economy.
When considering the strength of a particular economy, one measure is not enough. In the case of China, you can also look at the ratio of government debt to that growing GDP. For China, this ratio is only 20%. Especially when you compare this to the same ratio in the U. S. Which is 60%, you can appreciate how much stronger this makes the Chinese economy.
The growth in the economy in China does come with some concerns. For example, it could create the same kind of bubble that has been experienced in the West. With money flooding the economy, inflation may rise, and consumers may start spending beyond their means and overextending themselves on credit. The result could well be the economic crisis currently experienced, especially in America.
There is also concern over the market for Chinese goods. The downturn in the Western economy has resulted in fewer imports from China. China will not be able to continue to grow at its current rate without a viable marketplace for its products.
For America, this is a good thing because China holds more American debt than any other nation. If China chose to sell their American bonds, the effect would be disastrous. However, as this would also spell disaster for Chinese exporting, this is unlikely to occur.
Suffice it to say that, at present, the China economy is growing and will likely continue to do so. For how long it can continue is going to depend, at least partially, on the global economy. - 23309
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