China Stocks Grow With China Economy
The China economy is growing, and how much is a question of importance for every nation. All economies are now global so that changes in the economy of one nation will have an effect on all the rest and all eyes are on China stocks.
The GDP of China is increasing at a rate of 10% per year. Along with this growth, China has been buying up all the natural resources it can. There is concern that this is hurting other countries by limiting available resources. In any case, control of natural resources has always heavily influenced the global economy.
It is easy to throw out statistics such as a 10% growth rate. But one number never tells you the whole story. Another number to consider is that the ratio of the Chinese government debt to its GDP is a mere 20%. In the U. S., this ratio is over 60%. When you consider the debt ratio along with the growth in GDP, it makes the Chinese economy appear stronger.
The growth in the economy in China does come with some concerns. For example, it could create the same kind of bubble that has been experienced in the West. With money flooding the economy, inflation may rise, and consumers may start spending beyond their means and overextending themselves on credit. The result could well be the economic crisis currently experienced, especially in America.
There is also concern over the market for Chinese goods. The downturn in the Western economy has resulted in fewer imports from China. China will not be able to continue to grow at its current rate without a viable marketplace for its products.
For America, this is a good thing because China holds more American debt than any other nation. If China chose to sell their American bonds, the effect would be disastrous. However, as this would also spell disaster for Chinese exporting, this is unlikely to occur.
It is safe to say that the China economy is growing and most probably will continue to do so for quite some time. How long it will be able to continue that growth is going to be dependent, at least in part, on the economies around the globe. - 23210
The GDP of China is increasing at a rate of 10% per year. Along with this growth, China has been buying up all the natural resources it can. There is concern that this is hurting other countries by limiting available resources. In any case, control of natural resources has always heavily influenced the global economy.
It is easy to throw out statistics such as a 10% growth rate. But one number never tells you the whole story. Another number to consider is that the ratio of the Chinese government debt to its GDP is a mere 20%. In the U. S., this ratio is over 60%. When you consider the debt ratio along with the growth in GDP, it makes the Chinese economy appear stronger.
The growth in the economy in China does come with some concerns. For example, it could create the same kind of bubble that has been experienced in the West. With money flooding the economy, inflation may rise, and consumers may start spending beyond their means and overextending themselves on credit. The result could well be the economic crisis currently experienced, especially in America.
There is also concern over the market for Chinese goods. The downturn in the Western economy has resulted in fewer imports from China. China will not be able to continue to grow at its current rate without a viable marketplace for its products.
For America, this is a good thing because China holds more American debt than any other nation. If China chose to sell their American bonds, the effect would be disastrous. However, as this would also spell disaster for Chinese exporting, this is unlikely to occur.
It is safe to say that the China economy is growing and most probably will continue to do so for quite some time. How long it will be able to continue that growth is going to be dependent, at least in part, on the economies around the globe. - 23210
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posted by X - Men @ 2:40 AM
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