China still growing fast amid global crisis

China still growing fast amid global crisis

China has become one of the leading nations on the global economic front. But can it save the world from global economic crisis? China’s economy will surely sputter as trade slows, limiting it’s ability to help put a floor under the global economic decline.

Some observers believe that China will not be able to sustain the planet’s economic slowdown, even on a hypothetical front. Edwin Truman, senior fellow at the Peterson institute for International Economics says, “The notion that somehow they’re going to bail out the global economy, either on the real side or on the financial side, is naïve.” But another more optimistic economic analyst thinks along an opposite line stating that, “China isn’t that big an economy at commercial (market) exchange rates, but, they may help the economic growth from going negative.”

The thought of china being the hope for the global economy may however just be a hope in the unseen for itself is suffering from the economic slowdown. However the most prominent market (retail) still retains a bright spot on the chart. China’s retail sales grew 23.2% in August, slightly below a 12-year high of 23.3% in July. Some data, though, suggest consumer spending on luxury items, including cars, has slowed. China holds $1.8 trillion in foreign exchange reserves. Another economic analyst states that china’s government will boost spending on infrastructure and rural construction. She wrote in an email saying that “external perceptions of China’s near-term growth prospects are overly pessimistic.”

http://www.investors.com/editorial/IBDArticles.asp?artsec=16&artnum=1&issue=20081009

--M.A.Torres