The Chinese government is hinting that it does not need to put any more money on the table to keep its economic growth levitation act going without any more magic.
The apparent decision by the communist central committee is likely to hurt the nation by undermining GDP expansion as factory and export activities slow.
According to Reuters, “China has no need for a huge new economic stimulus, not least because the government has already taken extra steps to boost growth, the former head of the National Bureau of Statistics (NBS) said.”
Leaving aside the opinions of high placed officials, China’s plans for 8% GDP growth this year may have already been severely crippled.
Its largest trading partner, the US, may face an economic contraction that is close to 10% this quarter. The numbers in the EU and UK are no better.
China does not have enough consumer demand inside its borders to hit its goals. Too many of the workers who used to be buyers of goods and services are losing jobs as factories close and they are forced to move to rural areas.
China may be talking about expansion but its worry should not be about its rate of growth. It should be more concerned about the chances of a recession
Douglas A. McIntyre
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