Learning from China
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Learning from China - Blog

China’s latest 6.9% GDP growth - 'China hard landing' story bites dust for 10,000th time in last 30 years

17/7/2017

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China's latest economic data was published today (17 July 2017). It showed strong growth on all key indicators. Compared to the same period in the previous year:
  • GDP rose 6.9%;
  • Industrial value added rose by 7.6%;
  • Retail sales grew 11.0%;
  • ​Urban fixed asset investment rose 8.6%.
This is a performance exceeding any major Western economy by a huge margin.
​But do you remember all those stories in the media last year and since by Western 'China experts' about how China was supposedly going to suffer a 'hard landing'? For example on 5 April 2016 the Wall Street Journal reported:
'At a recent workshop hosted by the Council on Foreign Relations, a nonpartisan U.S. think tank, participants—35 or so academic economists, Wall Street professionals and geopolitical strategists—lined up around three different growth scenarios for China. Only 31% chose the optimistic one, defined as 4% to 6% annual growth, dependent on leaders successfully implementing reforms; 61% foresaw a “lost decade” of 1% to 3% growth; the rest thought a so-called hard-landing, or contraction, was most likely.''
'Of course it wasn’t a scientific survey, but what’s interesting is that apparently nobody considered the possibility that the Chinese government could deliver on its promise of “medium to fast” growth, meaning 6.5% or higher.'
​Given China's 6.9% GDP growth over a year later if that was the quality of analysis in the Council on Foreign Relations, one of the US's most august institutions, no wonder US foreign policy makes mistakes.
​The reality is, of course, there is an entire genre of 'econo-fiction' in the West which pursues the policy of an economic ostrich - put your head in the sand so you can't see reality. Probably its most notorious example is Gordon Chang's The Coming Collapse of China but thousands of other examples could be chosen.
​Serious analysts, who want to have an accurate view of China's and therefore the global economy, and who made such predictions of a China 'hard landing' or 'crash', will honestly admit 'I was wrong' - that is to be respected. Unfortunately experience shows that the 'econo-fantasists' predicting a China hard landing will continue to turn out their misanalysis - not merely making entirely wrong predictions but costing companies who believe it hundreds of millions of dollars.
​P.S. to give a flavour of the errors in financial media on China the pictures below show two articles from the Wall Street Journal. The first, from 17 July 2017, reports how China's GDP growth was 6.9% and easily hits its growth target. The second from 5 April 2016 was the one reporting the unanimous opinion of the economists in the US Council on Foreign Relations predicting it was impossible for China to hit its growth targets - and 61% believing China faced a 'lost decade' :-)
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  • Home
  • Economy
    • Economic development & China >
      • Economic growth & human well-being - the example of China
      • China is the greatest economic growth in human history
      • Why China's social achievements are even greater than its economic ones
      • Why China will grow rich long before it grows old
      • China faces slower Western growth than in the Great Depression
      • China's 'socialist development strategy' outperformed Western alternatives
      • Why did China grow so fast?
      • Why are China and India growing so fast?
      • The 'Belt & Road' region will be the main locomotive of the world economy
      • Growth in the G7 'Great Stagnation' Will Be Slower than in the Great Depression!
      • What China achieving 'moderate prosperity' means for itself & the world
      • China is now the main pillar of globalisation
      • Solar power illustrates China's manufacturing future
      • Why China has made the world's greatest contribution to increasing human rights
      • Socialist policies can help famine-stricken countries
      • Here’s why China and BRICS will drive global economic growth
      • BRICS are more important for world growth than the G7
    • Economic theory >
      • China's & Western economic theory >
        • Deng Xiaoping & John Maynard Keynes
        • Deng Xiaoping - the world's greatest economist
        • Why Adam Smith’s ‘classical theory’ correctly explained Asia’s growth
        • The global significance of China's discussion on the economy's 'supply side'
        • China lacks innovation? Take another look
        • A Copernican Revolution in Western economics & China’s supply side reform
        • Why Chinese neo-liberals are forced to falsify world history
        • Why China won't suffer a Western type financial crisis
      • Macro-economics & growth theory >
        • A damaging confusion in Western economics books
        • To become a high income economy China needs to study facts not myths
        • How Singapore achieved a higher per capita GDP than the US
        • The most important book on economic growth to have appeared for many years
        • Why do Western economies have hard landings but China doesn't?
        • Reality & myth of the US 'internet revolution'
      • International monetary system >
        • Europe's crisis & the Euro - predicted in advance
        • The limits of RMB internationalisation
        • China is right to maintain & tighten capital controls
      • China vs the errors of 'shock therapy' >
        • Why the economic reform succeeded in China & will fail in Russia
        • An economist's Mein Kampf
        • How IMF policies helped oligarchs loot Russia - lessons for China and other countries
    • 40 years of 'reform and opening up' >
      • Part 1 – The factual results of reform and opening up
    • US Economy & China >
      • Why neo-liberalism destabilised US politics
      • Why the US remains locked in slow growth
      • Economic logic behind Trump's foreign policy - the key countries are Germany &China
      • Trump's economy - cyclical upturn and long term slow growth
      • Economic data shows claim of US 'strong economic recovery' was a myth
      • The damaging blind alley of US protectionism
      • US economic growth under Trump - explained in 3 charts
      • China's economy is growing three times as fast as the US
      • The ‘Anglo-Saxon’ political crisis - from Reagan & Thatcher to Trump & Brexit
      • Why the US turned protectionist - while China defends an open global econmy
      • Why Trump won’t persuade Apple to produce the iPhone in the US not China
      • The American Way leads to Americans dying early
  • Foreign Policy
    • China's international relations >
      • China & India >
        • A 'must read' article on current China-India disputes
      • China & Russia >
        • Good China-Russia relations are the guarantee of world peace
        • Increasing interest in Russia in China's economic policy
        • What is really behind Trump's obsession with Russia
      • China & the US >
        • Why 'China bashing' is a disaster for the US people
        • Why a US-China ‘Thucydides Trap’ can be avoided
        • The real reason for the US South China Sea provocation
        • The real sinister relation of the US & 'jihadism'?
        • The neo-con forces behind Trump's Twitter attacks on China
        • Why the US not China threatens world peace
        • The new shape of world politics - disorder in the West, stability in the East
    • Theoretical bases of China's foreign policy >
      • Theoretical bases of China's "win-win" foreign policy concept
      • Hamburg G20 Summit highlights China's 'thought leadership'
      • How Xi Jinping’s Marxism out-thinks the West
      • One year on, impact of Xi's agenda-setting Davos speech still felt
  • China Analysts
    • New economic data shows diorientation of US foreign policy analysts
    • China's GDP data destroys ‘hard landing' myth again
    • Wrong analyses of China - listed by author and date
  • China's History
    • Socialism with Chinese characteristics >
      • The importance of Xi Jinping's speech to foreign political parties
      • China is most promising hope for third world: Fidel Castrp
    • The truth about China’s crucial role World War II is not only history
    • Comparison of Hong Kong and ‘poor whites’ in the US South
  • Other languages
    • 中文文章 >
      • 作为英国人我想对香港说,忘了港英时代吧!
    • Em Português >
      • Lições do desenvolvimento econômico da China para a América Latina
  • Blog
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