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Surge in Chinese growth as domestic demand takes priority
24th October 2009
China’s leaders have set ambitious targets for economic growth - with an aim of reaching 8% growth of real GDP in 2009, a year in which world trade has shrunk and much of the developed world has been mired in recession. An enormous stimulus programme seems to be having an effect with the latest data showing a pick up in output and annualised growth of GDP climbing above 8.5%. Exports remain weak and many Chinese manufacturers are finding that the prices they are able to get from advanced economy importers continues to fall - the terms of trade have moved against them. Lifting domestic demand has become a key macroeconomic objective for the Chinese government. China has poured £354billion into spending on infrastructure in order to boost its domestic economy as exports have suffered.
This BBC news video reports on the latest Chinese growth figures.
The importance of capital spending to the Chinese economy is shown by the latest GDP figures. Investment contributed 7.3 percentage points to headline growth of 7.7 percent, and consumption accounted for 4.0 percentage points. Net exports subtracted 3.6 percentage points reflecting the weakness of external demand for China’s manufactured products.
See also
BBC: China economic growth accelerates
The Times: The dragon roars again after new figures put China’s output on a growth hat-trick
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.