China Recruiting Blog

Slower Growth Is Not Bad News

I think it is funny that a hard landing for China is 5% growth.   We only dream of 5% growth in the West and call it a hard landing for China.

Well, they are not landing hard. They came in at 7.6%.

Check out the graphs at All Roads Lead To China to see.

Head over heals growth in real estate development calming down is not bad news.. It is more like sustainability than a rush to a crash.   Who else posted 7.6% growth this year?   Nothing else significant is happening compared to 1.3 billion people getting 7.6% better off year on year.

The people of China are used to big growth, so there is a political risk to any slow down, but slowing down to avoid a true crash is smart.

Imbalance in the Chinese economy is becoming more pronounced just the same.  Infrastructure carrying the economy is not sustainable when you already have the fastest train in the world and every third tier city is putting in a subway system.   The decreasing value of more infrastructure is becoming more pronounced.  They do need to double the width of most of the main interstate roads and toll booths., so there is still some work.  However,  I sense bigger problems will surface in 5 years time if the government cannot shift gears away from infrastructure.  The government has been equal to the task at more difficult times than these before.  For example, in 1998 they cut off most of the SOE’s and whole cities started to bankrupt, and that all worked out quite fine.

I recently opened an office in Wuxi in the Yangzte River Delta and will enjoy the subway when it opens.   I guess that the 5 million people here justify the investment for my business and that subway.

Additions?