Monday, January 20, 2014
China's Economy Grows 7.7 Percent in 2013
China has second-largest economy in the world and its economy has been growing significantly for the last several decades. However, China's economic growth decelerated in the final quarter of 2013 and appears set to slow further. China's growth is still very high comparing to other countries like U.S, Japan or any European countries. But China's growth rate decreased abruptly from two digit rates of the previous decade. Slowdown of China's economic growth will cause job losses and increases the challenges faced by the ruling Communist Party as it tries to re-balance the economy away from reliance on trade and investment.
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This is expected because China is a new growing economy. Paul Romer stated in his interview that this happens and that people think China will surpass the U.S but because it is slowly decreasing. No country can keep growing forever it will have to level out sooner or later. In this case it can be harsh on civilians because jobs will be lost. Even with a steady increase of growth the economy can grow which is what the U.S. is using. China should invest in human capital instead of relying on trade.
I second that. Also, China might want to look into a growth model that's not only sustainable, but shifting toward intrinsic.
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