Attention Economy


Friday, August 14, 2015

China’s Economy – A Realistic Appraisal

Economist Nicholas Lardy (of The Peterson Institute for International Economics) critiques the the frequent questioning of the quality of Chinese GDP data in the American media:
Lardy makes a critical point –
“More importantly, the skeptics have taken insufficient notice of China’s progress in transitioning to its new model of economic growth, one less dependent on expanding industrial output, investment, and exports and more dependent on expanding private consumption expenditure. After a decade of relative stagnation, since the first half of 2012, China’s services sector has become the main driver of its economic growth. The services sector has grown continuously more rapidly than GDP, and its share of the economy now exceeds that of industry. Expanding demand for services such as health care, education, entertainment, and travel generates little or no demand for industrial goods, electric power, or freight transport. The demand for passenger transport, in contrast to freight, is soaring as domestic tourism booms.”

Related:
An interesting and balanced analysis from a Federal Reserve Bank of San Francisco economist:

China increasingly matters more than any other economy in the world - it has been the single biggest contributor to global growth over the past decade -

On the reliability of Chinese output figures

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BBC’s special report on the transformation of a Chinese village in just a decade is worth watching
http://www.bbc.co.uk/news/resources/idt-dd0e6fd5-12fc-4a4a-a0eb-4ef064900f92