Are You Investing In China?
The China economy is growing, without a doubt. China stocks are rising. How much is an important question for everyone in the world. With all economies being global, increases or decreases in the growth of one country will affect all the others.
The Chinese economy, in terms of its GDP, is said to be growing at a rate of around 10% a year. There is some concern that this growth comes at the expense of other countries in the world because it is buying up all the available natural resources possible. This ability to buy up whatever it needs has influence on a global level.
Statistics are always tricky things. They can be massaged and combined to make you view a situation in a particular way. But consider this. The GDP of China is not only growing at around 10%. The ratio of government debt in China to GDP is only 20% compared to the U. S. Which is over 60%. This ratio makes the economy in China even stronger.
There is some concern, however, that the growing economy in China could result in the same economic crises that we have been experiencing in the West. It may cause rising inflation as well as consumers extending their credit well beyond their ability to repay. The resulting bubble may create the same economic downturn experienced elsewhere right now, particularly in America.
China also needs to be concerned about markets for the goods it is producing. One result of the economic situation in the West has been a decrease in the amount of goods imported from China. If China is to continue growing economically, it needs to have markets for Chinese products.
This is actually good news for America as it makes it extremely unlikely that China will cause problems with the amount of U. S. Debt held. China is also the owner of more American debt than any other country. If they choose to sell the treasury bonds which they hold, the effect on the American economy would be disastrous. But, for them to depress the American economy further, would only result in less exports for China.
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. - 23305
The Chinese economy, in terms of its GDP, is said to be growing at a rate of around 10% a year. There is some concern that this growth comes at the expense of other countries in the world because it is buying up all the available natural resources possible. This ability to buy up whatever it needs has influence on a global level.
Statistics are always tricky things. They can be massaged and combined to make you view a situation in a particular way. But consider this. The GDP of China is not only growing at around 10%. The ratio of government debt in China to GDP is only 20% compared to the U. S. Which is over 60%. This ratio makes the economy in China even stronger.
There is some concern, however, that the growing economy in China could result in the same economic crises that we have been experiencing in the West. It may cause rising inflation as well as consumers extending their credit well beyond their ability to repay. The resulting bubble may create the same economic downturn experienced elsewhere right now, particularly in America.
China also needs to be concerned about markets for the goods it is producing. One result of the economic situation in the West has been a decrease in the amount of goods imported from China. If China is to continue growing economically, it needs to have markets for Chinese products.
This is actually good news for America as it makes it extremely unlikely that China will cause problems with the amount of U. S. Debt held. China is also the owner of more American debt than any other country. If they choose to sell the treasury bonds which they hold, the effect on the American economy would be disastrous. But, for them to depress the American economy further, would only result in less exports for China.
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. - 23305
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posted by Mr. Forex at
5:11 AM
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