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Macroeconomics and Economic Growth

China’s growth surprises on the downside

David Dollar's picture

Although exports have slowed down, they contributed to China's GDP growth in 2008. But in this gloomy global economy, some factories will close and workers will lose jobs as it slows down further.
China’s growth rate in the third quarter fell to 9.0%, the lowest rate since the SARS crisis in 2003. Everyone expected that the global slowdown and disruption from the Olympics would take some of the froth off China’s economy. But the median forecast among specialists who follow China was 9.7%, so it is fair to say that the drop was a big surprise.

The details of the third quarter report provided some good news. Exports are slowing gradually, but still contributed to the GDP growth in 2008. Retail sales growth hit its highest level in nine years and was at 18% in real terms in September. So far, Chinese consumption is holding up. And the easing of inflation to under 5% means that the government has scope to loosen monetary and fiscal policy. The government is planning to respond to the potential for further growth declines with accelerated spending on reconstruction of the earthquake-affected areas and with infrastructure projects more generally.

On the eve of the Olympics (I) - China’s economy is humming along

David Dollar's picture

China’s growth has held up well so far in 2008 (take a look at the Bank's Quarterly Update  for more details).  Growth rate for the first half was slightly over 10%.  Recently there has been concern about the slowdown in the growth of exports: from 28% year-on-year increase in May to 18% in June.  But monthly figures are erratic, and I am more impressed t

Cambodia's Relative Peace Brings the Challenges of Growth

Stéphane Guimbert's picture

Workers scale one of the skyscrapers under construction in Cambodia.
Last Sunday, more than 8 millions Cambodians were called to vote. This is already the fourth general elections since the 1991 Paris Peace Agreement. Many – including me before I moved to our Phnom Penh office last summer – still connect Cambodia first to what we learned in history classes. The splendor of the Angkor civilization and the atrocities of the Khmer Rouge regime probably come on top of the list. And there is some truth to that. Angkor Wat and its neighboring temples remain magnificent. The Khmer Rouge regime has left deep stigma for the people and for the society. The Khmer Rouge tribunal is attracting a lot of international attention as well. Most landmine fields have been cleared, although there remain some in more remote areas.

But, for all this, this connection more and more misses a key fact: over the last couple of years, Cambodia has achieved a relative peace that has enabled dramatic social and economic change.

Live discussion on China with David Dollar and Louis Kuijs - Transcript

Claudia Gabarain's picture

Regular bloggers David Dollar and Louis Kuijs participated earlier today in a live online discussion on the World Bank site about the latest edition of the

China’s economic slowdown—what to do?

Louis Kuijs's picture

The World Bank released the China Quarterly Update —of which I’m the lead author, full disclosure here-- today at a press launch in our Beijing office. The economic journalists noticed that the Bank’s projection for GDP growth in 2008 is now 9.8 percent, more than 2 percentage points lower than the outcome in 2007.

The Global Food Crisis: Will Investments in Agricultural Technology be enough?

Forhad Shilpi's picture

Contributed by Forhad Shilpi and Uwe Deichmann

Will investments in agricultural technology by themselves be sufficient to ensure long-term productivity growth in the farm sector and, more importantly, for rural poverty reduction?  As rapidly rising food prices threaten food security and the poverty gains made by developing countries, many have blamed declining funding for agricultural technology development for this state of affairs (for example, the New York Times).

This question is highly relevant for South Asia.  Shanta Devarajan has commented on the recent rice export ban by India and its implication for its neighbor, Bangladesh, which has become a net rice importer this year due to floods and cyclone impacts.  But Bangladesh also provides evidence that agricultural technology by itself is unlikely to lead to adequate growth in agricultural output if factors such as physical and economic geography and infrastructure needs are not considered.

In a recent study, we examine these issues for Bangladesh. During the early 1990s, Bangladesh experienced widespread diffusion of green revolution technology in rice, its main crop. As a result, rice production has more than doubled since the early 1970s. The spread of green revolution technology is usually expected to boost wages for farm workers.  But we found regional differences in rural wages that run counter to the traditional argument.


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