Thursday, December 8, 2016

Economy: China - Good News From The Economic Front

(Drivebycuriosity) - If we believe the media, China is in a deep mess, but the data from the economic front show quite the contrary - China is getting stronger. This morning we learned that China` imports rose 6.7 % year-on-year in November, the biggest gain since September 2014 (imports). The reported import number was also the highest so far in 2016 (charts below). Exports unexpectedly edged up 0.1% from a year earlier (exports). It was the first increase in eight months.

The goods news were neglected in the media as usual. They don´t fit into the gloomy picture New York Times blogger Krugman and other pundits want us to believe. But the China pessimism is ill-founded. The huge country is still in the begin of a secular catching-up process which is fueled by extreme income & wealth differences to the US and other Western nation values. Today China has about $7,500 income per capita, the US number is  $54,600 (worldbank).

China is transforming into a modern service economy, fostered by the technological progress (E-Commerce, Fintech). People are flooding into the big cites. The rapid urbanization creates millions of jobs and is driving income growth for the whole nation. Swift rising incomes are fueling consume and so the economic growth of China.

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