Monday, October 20, 2008
China's economic growth rate slows down
The country's economic growth rate has fallen for the third quarter in succession. Its current growth rate is 9%, as compared to the previous 10.1% over the previous quarter. The Chinese government has started some measures to prevent the economy from plummeting. These included changing its focus from preventing the overheating of the economy and preventing structural inflation to the "preserving growth" and "controlling" inflation. Inflation is kept under control. The National Bureau of Statistics also announced that consumer price inflation had cooled to a 15-month low of 4.6% in September. In February, the inflation rate had hit a 12-year-peak of 8.7%.
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3 comments:
I think even though China can control its inflation rate, its growth rate will not stop going down until the U.S economic crisis stops since China's biggest export source is the U.S.
Aside from the effect of the financial crisis in the U.S., I think we might want to keep in mind the article about Asia's growth that we've read and discussed in class a few weeks ago, about how developing countries often tend to pick up growth very fast and start to slow down after reaching its peak. I'm not sure if China has reached its limit, but it is sure showing a slower growth rate right now.
Economists in China say that this is mostly attributed to the global financial crises and the international credit crunch,The government has started talking about tax cuts and The People's Bank of China has cut interest rates twice and reduced banks' required reserves since mid-September. A third interest rate cut is expected later this year.
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