Introduction
China: every day, the media reports unquieting news. We hear that China is in recession, pulling down all other emerging countries with it, stock markets crashing, currency manipulations, et al. Some fact checking is in order.
There are concerns about the accuracy of China government data. For that reason, I have supplemented data from the Chinese National Bureau of Statistics with data collected by the United Nations Conference on Trade and Development (UNCTAD) and FocusEconomics. The latter derives much of its data (consensus forecasts) from private banks and other financial entities that report regularly on China.
China – Looking Back – The Amazing Last 40 Years
As Table 1 suggests, China’s growth over the last 40 years. And it has been truly remarkable. Over that time, it has averaged a compound annual GDP growth rate of 10%. This was propelled by an even more impressive growth in exports averaging around 15% over the same period. That meant an increase in GDP per capita from $308 in 1980 to $7,975 in constant dollars. I am not a historian, but I do wonder if any country has been able to increase the economic well-being of its people by so much in such a short time.
Table 1. – GDP and Export Growth in China
Sources: Chinese National Bureau of Statistics, FocusEconomics.
.Global Export Leaders
For many years, the US and Germany competed to be the leading exporter. That has changed. As Table 2 indicates, China is now the largest exporter. In addition, South Korean exports have grown rapidly and US export growth has also remained impressive.
Table 2. – Leading Exporters, 2007 – 2014 (in mil. $)
Source: FocusEconomics.
.The Transition
However, China is now in a transition and export growth is slowing. The export “era” is giving way to providing goods and services for a growing and increasingly prosperous middle class. Initially as the stimulus from export growth slackened, the government made up the difference with large infrastructure investments that bode well for the country’s future. This can in part be inferred from the declining export share of GDP (Table 1).
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