Big Bad Panda

PandaSign People lately have been really worried about China and their large growth as of late. They ask someone who is so capitalist as I am and say "how can a communist country be growing that fast?"

First, I remind them that China is liberalizing their Economy to be more free market, while keeping political freedoms strict. It used to be that they were not allowed to trade with the world and each other. That’s like saying California and Nevada cannot trade. They are changing these rules.

Second, I remind them that the Chinese government is the one that reports their numbers of growth. Just like the Soviets did during the Cold War. 

The Economist is reporting that China’s GDP is 40% smaller than it was thought before.

"What has happened is that the World Bank has changed the calculations is uses to make international comparisons of the size of economics… Converting a poor country’s GDP into dollars at market exchange rates can understand the true size because a dollar buys much more in an emerging market…"

It says though even though it is revised is it still the second largest economy in the world. It is expected to over take Germany as the world’s largest exporter too. I personally am surprised it already isn’t.

There you go…

  1. China is growing fast and its not as fast as you might believe
  2. China is growing through capitalistic principles and not socialist ones.
  3. You have no reason to worry that China is growing anyway.

Each state has its own GDP, should Michigan worry that Virginia is growing faster than them. No, they should try to grow as much as they can regardless of the rest of the country.

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Published in: on February 13, 2008 at 9:11 pm  Leave a Comment  

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