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Macroeconomics and Economic Growth

Your questions on China's economy answered - see the transcript

James I Davison's picture

In case you weren't able to join World Bank economists and regular bloggers David Dollar and Louis Kuijs earlier today in a live online chat, a transcript from the in-depth discussion is available here.

China and stimulus packages: the best way to respond to more bad news?

Louis Kuijs's picture

A few days ago, our country director David Dollar blogged about the two-sided picture we see when we look at China's economic growth. The economy saw very weak export demand, which partly carried over into weak investment in manufacturing and other "market-based" sectors. Continued growth in other parts of the domestic economy was supported by policy stimulus.

China has weathered the crisis better than many other countries because it does not rely on external financing, its banks have been largely unscathed by the international financial turmoil, and it has the fiscal and macroeconomic space to implement forceful stimulus measures. China’s government has made use of this policy space by pursuing pretty forceful fiscal and monetary stimulus. From early November last year onwards, the government's 10-point plan ("RMB 4 trillion package") is being implemented. This plan emphasizes infrastructure and other investment, financed in part by government budget spending, and in part by bank lending. And the government has taken some additional, more consumption-oriented measures.

Chat live with China experts David Dollar and Louis Kuijs on March 26

James I Davison's picture

With the release last week of its latest quarterly assessment of the Chinese economy, the World Bank lowered its projection for China's GDP growth to 6.5 percent in 2009, yet remained optimistic that the country's economy has started to show signs of stabilizing amid global financial turmoil.

Reading tea leaves for signs of China's recovery

David Dollar's picture

Click chart to see larger version.
What to make of it when, within a few hours last week, the statistical bureau depressed us with a 26% decline in exports for February and then elated us with a 27% increase in urban fixed asset investment? These two figures capture nicely the struggle that is going on within the Chinese economy.

We launched our China Quarterly report today with our take on how to reconcile the conflicting data. Clearly, the global economy is in very poor shape. Global GDP declined at an annualized rate of 5% in the fourth quarter of 2008, and global industrial production declined at a 20% rate. These are shocking numbers that those of us born after the 1930s have never seen. Naturally this has had a large effect on China, which is an open, export-oriented economy. China's seasonally adjusted monthly exports peaked at around $120 billion last fall, and then fell off a cliff – dropping by about one-third (see chart).

Defying gravity? Chinese banks respond to stimulus, increase lending

James Seward's picture

InstabilityThere has been a noticeable lack of entries to the East Asia & Pacific finance blog recently, but unfortunately I've been otherwise occupied on a trip in Beijing. It has certainly been a busy time here in China's capital with the National People's Congress (NPC) going on. However, I haven't seen much of it other than the long traffic jams caused by the road closures. The NPC meetings covered some of the domestic economic stimulus plans, but it has not dealt directly with financial sector issues. Maybe it did not need to since the banks here have already responded to the stimulus.

A recent China Daily report had a great graphic that showed the recent boom in lending by the banking sector, which corresponds very nicely to the announcement of the original economic stimulus plan. As I highlighted in a prior blog post, the $586 billion economic stimulus plan announced in November was only 30 percent funded from the central government, and the expectation was that much of the rest was to come from state-owned banks. Well, it seems they have delivered with gusto!

Underrated Indonesia poised to enter global stage

Wolfgang Fengler's picture

Indonesia is still underrated globally. Why does the world not notice? One reason is particularly poor performance in sports and higher education, two areas that give countries a lot of international exposure.

Changing the world (map), one dataset at a time

James I Davison's picture

If you are a visual learner like me, or you just happen to like nifty animated maps, a site called SHOW World may be worth spending an afternoon coffee/tea break or two to check out. Similar to the popular WorldMapper collection, this site displays a lot of data from a number of sources (including, apparently, the World Bank) in map form. On an Excel spreadsheet, the information would just look like numbers or a boring old graph.


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