Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
US Coronavirus Trend Trajectory Forecast Current State - 7th Apr 20
Boris Johnson Fighting for his Life In Intensive Care - UK Coronavirus Crisis - 7th Apr 20
Precious Metals Are About To Reset Like In 2008 – Gold Bugs, Buckle Up! - 7th Apr 20
Crude Oil's 2020 Crash: See What Helped (Some) Traders Pivot Just in Time - 7th Apr 20
Was the Fed Just Nationalized? - 7th Apr 20
Gold & Silver Mines Closed as Physical Silver Becomes “Most Undervalued Asset” - 7th Apr 20
US Coronavirus Blacktop Politics - 7th Apr 20
Coronavirus is America's "Pearl Harbour" Moment, There Will be a Reckoning With China - 6th Apr 20
Coronavirus Crisis Exposes Consequences of Fed Policy: Americans Have No Savings - 6th Apr 20
The Stock Market Is Not a Magic Money Machine - 6th Apr 20
Gold Stocks Crash, V-Bounce! - 6th Apr 20
How Can Writing Business Essay Help You In Business Analytics Skills - 6th Apr 20
PAYPAL WARNING - Your Stimulus Funds Are at Risk of Being Frozen for 6 Months! - 5th Apr 20
Stocks Hanging By the Fingernails? - 5th Apr 20
US Federal Budget Deficits: To $30 Trillion and Beyond - 5th Apr 20
The Lucrative Profitability Of A Move To Negative Interest Rates - Pandemic Edition - 5th Apr 20
Visa Denials: How to avoid it and what to do if your Visa is denied? - 5th Apr 20 - Uday Tank
WARNING PAYPAL Making a Grab for US $1200 Stimulus Payments - 4th Apr 20
US COVID-19 Death Toll Higher Than China’s Now. Will Gold Rally? - 4th Apr 20
Concerned That Asia Could Blow A Hole In Future Economic Recovery - 4th Apr 20
Bracing for Europe’s Coronavirus Contractionand Debt Crisis - 4th Apr 20
Stocks: When Grass Looks Greener on the Other Side of the ... Pond - 3rd Apr 20
How the C-Factor Could Decimate 2020 Global Gold and Silver Production - 3rd Apr 20
US Between Scylla and Charybdis Covid-19 - 3rd Apr 20
Covid19 What's Your Risk of Death Analysis by Age, Gender, Comorbidities and BMI - 3rd Apr 20
US Coronavirus Infections & Deaths Trend Trajectory - How Bad Will it Get? - 2nd Apr 20
Silver Looks Bearish Short to Medium Term - 2nd Apr 20
Mickey Fulp: 'Never Let a Good Crisis Go to Waste' - 2nd Apr 20
Stock Market Selloff Structure Explained – Fibonacci On Deck - 2nd Apr 20
COVID-19 FINANCIAL LOCKDOWN: Can PAYPAL Be Trusted to Handle US $1200 Stimulus Payments? - 2nd Apr 20
Day in the Life of Coronavirus LOCKDOWN - Sheffield, UK - 2nd Apr 20
UK Coronavirus Infections and Deaths Trend Trajectory - Deviation Against Forecast - 1st Apr 20
Huge Unemployment Is Coming. Will It Push Gold Prices Up? - 1st Apr 20
Gold Powerful 2008 Lessons That Apply Today - 1st Apr 20
US Coronavirus Infections and Deaths Projections Trend Forecast - Video - 1st Apr 20
From Global Virus Acceleration to Global Debt Explosion - 1st Apr 20
UK Supermarkets Coronavirus Panic Buying Before Lock Down - Tesco Empty Shelves - 1st Apr 20
Gold From a Failed Breakout to a Failed Breakdown - 1st Apr 20
P FOR PANDEMIC - 1st Apr 20
The Past Stock Market Week Was More Important Than You May Understand - 31st Mar 20
Coronavirus - No, You Do Not Hear the Fat Lady Warming Up - 31st Mar 20
Life, Religions, Business, Globalization & Information Technology In The Post-Corona Pandemics Age - 31st Mar 20
Three Charts Every Stock Market Trader and Investor Must See - 31st Mar 20
Coronavirus Stocks Bear Market Trend Forecast - Video - 31st Mar 20
Coronavirus Dow Stocks Bear Market Into End April 2020 Trend Forecast - 31st Mar 20
Is it better to have a loan or credit card debt when applying for a mortgage? - 31st Mar 20
US and UK Coronavirus Trend Trajectories vs Bear Market and AI Stocks Sector - 30th Mar 20
Are Gold and Silver Mirroring 1999 to 2011 Again? - 30th Mar 20
Stock Market Next Cycle Low 7th April - 30th Mar 20
United States Coronavirus Infections and Deaths Trend Forecasts Into End April 2020 - 29th Mar 20
Some Positives in a Virus Wracked World - 29th Mar 20
Expert Tips to Save on Your Business’s Office Supply Purchases - 29th Mar 20
An Investment in Life - 29th Mar 20
Sheffield Coronavirus Pandemic Infections and Deaths Forecast - 29th Mar 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Is China's Economic Miracle About to Burst Like a Bubble?

Economics / China Economy Apr 22, 2013 - 04:53 AM GMT

By: Pravda

Economics

The bright Future of China is being predictably pushed back indefinitely. The GDP growth has slowed down. In the first quarter of 2013, the growth made up 7.7 percent, while China closed last year with the index 7.9 percent. Despite the fact that this growth may seem low for China, the consequences of the reduction already affect the world.


For comparison, Russia's GDP growth last year made up 4.3 percent. However, the situation in our country (as well as in other countries) differs a lot from the state of affairs in China. The processes similar to those that are now taking place in China, took place in Russia during the 1930s. The mass exodus of people from villages provides industrial and urban development. Production is booming because of cheap labor force. This, in turn, increases the need of the state in raw materials. Given the scale of the Chinese industrialization, it has significantly increased the demand on raw materials in the world.

Until the last decade, China's GDP growth exceeded 10 percent a year. The phenomenon led to the appearance of the Chinese economic miracle and a future superpower - a world leader. At the very least, science fiction writers love this scenario. However, objectively it was clear that the economic growth can not go on forever through industrialization. It looks like the setback period has arrived. Globally, there is nothing wrong with that: the process is quite natural and logical. Developed countries have experienced it at one time or another, and this experience is yet to come for developing states. If we take special cases, financial turmoil is in store for the whole world.

Actually, the turmoil has already begun. Monday showed a record low price on gold on stock exchanges. The last time, when gold fell that low, was about 30 years ago. One of the reasons was the slowing GDP growth in China: the market reacts to such things quickly and violently.

China's foreign trade partners, such as Australia, Latin America and Africa, will suffer enormous losses. Their economy is based on China's GDP growth of not less than nine percent a year, the co-head of the Asian Economic Research of HSBC, Frederic Neumann, told The Financial Times.

The process will affect both domestic and international markets. The Chinese economy is used to industrialization. Now the economy will have to face new challenges, and only time will show to which extent the Chinese economy can be global.

For example, Chinese builders and developers adjusted themselves to active sintering processes. There are tens of thousands of urban houses built in the country every year. The buildings are designed for the rapid growth of the urban population. In Shanghai alone, there were about 240 million square meters of housing built during the past decade. Real estate prices rose 3.6 times. Many other projects are being developed too. The new houses, in the first place, meet the needs of the Chinese in the roof over their heads - quality does not come as a priority. Houses are built close to each other, good quality materials are rarely used, apartments are extremely small by European standards. However, a few years ago, such housing was in great demand. Chinese developers say that it was quite possible to sell 60 houses in three hours during their golden age - the mid-2000s , The Vedomosti reports. Apartments were literally snapped up like hotcakes, although, perhaps, it takes longer time for cakes to sell. One should bear in mind the fact that the official Chinese ideology denies private property, so apartments are not available for sale - they become available for long-term rent for 70 years. The price of the rent is equal to the price, at which one may become a full-fledged owner of an apartment in other countries of the world.

This time goes down in history slowly but surely. The Chinese have noticed that the skyrocketing revenue growth in the past concealed enormous debts, corruption and environmental pollution. Drawbacks began to dominate pluses. The Chinese economy has started the process of correction.

Anastasia Garina

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules