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The economy is gloomy? Wait until it hits 5% or less. Heh heh

China: Where 9% GDP growth is recession – Top Stocks Blog – MSN Money

China: Where 9% GDP growth is recession
Posted Oct 20 2008, 06:46 AM by Douglas McIntyre

China’s big stock index, the Shanghai Composite, has fallen from a 52-week high of over 6,000 to 1,974. Idiot math would say that is equivalent to the DJIA trading at 4,600. That may be a simpleton’s view of the world, but the perspectives of the foolish as not always wrong.

China announced that its GDP grew only 9% in the third quarter. That number was supposed to be closer to 10%.

According to Reuters, “A gloomy outlook lies ahead after the third quarter, and concerns about the slowdown now outweigh concerns about inflation,” said Chen Jinren, an analyst at Huatai Securities.

In the U.S. and Europe, a recession is still probably defined at two consecutive quarters of GDP shrinkage. In a world where 4% growth is burning up the track China’s increase of 9% seems unattainable. But, in an economy which relies on rapid growth to build a middle class and huge industrial base, even a modest drop in a torrid quarterly improvement pattern probably spells significant problems.



Written by mrcauser

October 24, 2008 at 5:52 pm

Posted in Uncategorized

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