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Opinion: China’s Growth Exaggerated

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I often hear and see political savvy people discussing and writing about countries in the Arab Spring, Latin America and Asia. Discussions centered on development and growth occur everyday, with money pouring out of organizations like the World Bank or the International Monetary Fund. A poster child for development has seemed to be China, but upon closer look, the Chinese might be in serious economic trouble.

China’s single-party system mixed with capitalist principles has created a giant case study for academics. Many are interested in what may happen to China in coming years; will it be democratic, or will it still be a communist state? I feel that it is a common misconception in American culture that the Chinese, Indians or Mexicans are taking our jobs, as the United States moves into a more service-oriented economy. According to CNBC, China has experienced an average annual gross domestic product increase of 10.6 percent since 2002. To put that into perspective, the United States sees growth of roughly 3 percent on average each year and considers that to be wonderful. China’s GDP has grown, but does it really count?

A large majority of Chinese GDP growth has come from government funded and/or run projects having to do with housing and malls. In fact, according to BBC, there are 64 million empty apartments in China. These apartments are too inconvenient and too expensive for the general population. Oversupplying the housing market could create a housing bubble bigger than that of the United States. The government tried to plan for urbanization, but apparently did so too quickly, or earnestly. In addition, China has mechanisms and policies of population growth limitation, which could cause the economy to contract.

It is often brought up the China has large amounts of money invested in the United States, hinting that China has power over the United States. In reality, the United States employs a decent amount of the Chinese population, and China could experience decreased rates of growth or even contractions in the economy within the near future. Will China continue to succeed with massive amounts of growth and development? Or will it fall, allowing another country to possibly develop and take its place? The United States has economic problems of its own, but the Chinese economy has far bigger problems to worry about.

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