logo

China Economy Is Now At The Center Of The World
By: Wall Street Window   Saturday, November 28, 2009 12:20 PM

Vote for next session
The next market session will close:

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 in China is experiencing a growth rate of about 10% annually. One concern about the growth is that, as China buys up natural resources, it may hurt other countries by limiting their access. In any case, controlling natural resources always has global influence.

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.



(0)
No Comments
Post Comment
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
   
 
 
 
 
   
 

The above story is the opinion of the author only and it does not reflect iStockAnalyst opinion. Further, the author is not personally advising you regarding the suitability of the story for your investment needs. In no event iStockAnalyst will be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from or arising out of, or in connection with the use of this information. Please consult your investment advisor before making any investment decision.
  
Advertisement
Popular Articles
Related Press Releases
Advertisement
Partner Center
Recent Articles by Wall Street Window



Subscribe to Email Alerts rss feed or RSS feeds rss feed for articles from more than 500 contributors, press releases, SEC filings and full text news from more than four thousand sources.
Fundamental data is provided by Zacks Investment Research, market data is provided by AlphaTrade. , and Commentary and Press Releases provided by Quotemedia