Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Middle-of-the-road kingdom: China

Posted by hkarner - 18. Juli 2017

Date: 17-07-2017
Source: The Economist

For such an exciting economy, China’s growth numbers are suspiciously boring. Last year the country reported the same figure—6.7%—for three quarters in a row. The headline data for the first half of 2017, released today, conformed to this pattern of implausible consistency. They showed growth of 6.9% in the second quarter, following 6.9% in the first.

Beneath the surface, however, some more interesting trends are playing out. China’s nominal growth number, which makes no adjustment for inflation, is often a better guide to momentum than the “real” number. It slowed dramatically in late 2015 and has since recovered strongly. The recovery gave the government confidence to tighten credit and crack down on shadow banking. That, in turn, precipitated a spike in interest rates and a bond-market rout, prompting the government to back off a little. It takes a lot of policy zigs and zags to keep the growth figures so straight and narrow.

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