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Talk of economic crisis in China defies the facts
November 21, 2011, Monday
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THE world's major economic centers have recently finished publishing data on the gross domestic product in the third quarter of this year. This provides a suitable opportunity to review the growth of the global economy.
The trends shown are evident - economic growth in China continues to outpace the rest of the world by far. The Chinese economy is growing roughly four times as fast as the United States and more than six times as fast as the European Union.
The data therefore also clearly refute claims being made in sections of the international media that China faces an economic crisis which is in any way comparable to that currently affecting Europe and the US.
Comparing the third quarter of 2011 with a year earlier, the US economy grew by 1.6 percent, the EU economy by 1.4 percent, and Japan's economy contracted by 0.2 percent - this last figure being highly distorted by Japan's earthquake and tsunami. China's economy in contrast grew by 9.1 percent.
The full scale of the difference in China's performance compared with other major economic centers becomes even more apparent if the overall period since the start of the financial crisis is analyzed.
Taking into account the latest data, the full scale of the difference in the economic performance of China compared with the US, Europe and Japan during the international financial crisis is shown in the chart. It is summarized by the following data:
In the four years to the third quarter of 2011, China's GDP expanded by 42.2 percent.
In the same period, US GDP increased by 0.6 percent.
In the same period, EU GDP shrank by 0.7 percent.
In the same period, Japan's GDP contracted by 3.5 percent.
These are evidently quite extraordinary statistics. During the four-year period covering the financial crisis, China's economy expanded 70 times faster than the US.
Such data also show why claims that China is in an economic crisis which is in some sense equivalent to that in the US or Europe are simply an attempt to undermine rational thought by destroying any serious scale of quantitative comparison.
To give an example, a recent article by Nouriel Roubini and Ian Bremmer in the Wall Street Journal is entitled "Whose economy has it worst?" It is introduced: "With Europe, China and the US in crisis, the real question is which of them will stumble first."
The data given above show such claims are simply hollow bombast. GDP growth of 42.2 percent in China, an annualized 9.8 percent over the last four years, is not remotely comparable to the US's annualized 0.2 percent, or the EU's annualized minus 0.2 percent.
If the US or EU had 42.2 percent GDP growth in four years, Roubini and Bremmer would be claiming it as one of the greatest economic booms of all time.
The basis of any serious analysis or theory is facts. Those who refuse to refer to the data of the relative performance of China, the US or Europe during the last four years do so because their analyses will not stand the test of examination by these facts.
The trends shown are evident - economic growth in China continues to outpace the rest of the world by far. The Chinese economy is growing roughly four times as fast as the United States and more than six times as fast as the European Union.
The data therefore also clearly refute claims being made in sections of the international media that China faces an economic crisis which is in any way comparable to that currently affecting Europe and the US.
Comparing the third quarter of 2011 with a year earlier, the US economy grew by 1.6 percent, the EU economy by 1.4 percent, and Japan's economy contracted by 0.2 percent - this last figure being highly distorted by Japan's earthquake and tsunami. China's economy in contrast grew by 9.1 percent.
The full scale of the difference in China's performance compared with other major economic centers becomes even more apparent if the overall period since the start of the financial crisis is analyzed.
Taking into account the latest data, the full scale of the difference in the economic performance of China compared with the US, Europe and Japan during the international financial crisis is shown in the chart. It is summarized by the following data:
In the four years to the third quarter of 2011, China's GDP expanded by 42.2 percent.
In the same period, US GDP increased by 0.6 percent.
In the same period, EU GDP shrank by 0.7 percent.
In the same period, Japan's GDP contracted by 3.5 percent.
These are evidently quite extraordinary statistics. During the four-year period covering the financial crisis, China's economy expanded 70 times faster than the US.
Such data also show why claims that China is in an economic crisis which is in some sense equivalent to that in the US or Europe are simply an attempt to undermine rational thought by destroying any serious scale of quantitative comparison.
To give an example, a recent article by Nouriel Roubini and Ian Bremmer in the Wall Street Journal is entitled "Whose economy has it worst?" It is introduced: "With Europe, China and the US in crisis, the real question is which of them will stumble first."
The data given above show such claims are simply hollow bombast. GDP growth of 42.2 percent in China, an annualized 9.8 percent over the last four years, is not remotely comparable to the US's annualized 0.2 percent, or the EU's annualized minus 0.2 percent.
If the US or EU had 42.2 percent GDP growth in four years, Roubini and Bremmer would be claiming it as one of the greatest economic booms of all time.
The basis of any serious analysis or theory is facts. Those who refuse to refer to the data of the relative performance of China, the US or Europe during the last four years do so because their analyses will not stand the test of examination by these facts.
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