China’s Economy: An alternative view

China’s official figures both understate and overstate inflation

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IS CHINA’S economy underheating? Not long ago, many people would have scoffed at the suggestion. The country is known for searing property prices, hot-money inflows and the steam escaping from its financial furnaces. The stock of outstanding credit, broadly defined, climbed to over 180% of GDP at the end of 2013, according to the central bank, and over 215%, according to an even broader measure by Fitch, a ratings agency.


But house prices are slowing, exports are weak and shadow banking is losing ground to traditional lending. Forecasters expected industrial output to grow by 9.5% in the first two months of 2014, compared with a year earlier; it grew by only 8.6%.

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China Prices a 'Smoothed Version of Reality'