GDP

(Available in Chinese)

This is the first blog post I write after revisiting China’s recent economic developments, the outlook, and policy implications as part of writing our latest China Quarterly Update. After this general overview I will in a few days write one on some interesting medium term trends on relative prices and the relative importance of external trade in China’s economy (they are also discussed in the Quarterly).

The term “normalization” has been used a lot lately in relation to the composition of growth and macroeconomic policy stance, also in China. But it is hard to avoid it. During 2010, China’s composition of growth started to “normalize”—as in look like it typically does—after the spectacular developments in 2009, when a massive government-led domestic demand surge offset a huge contraction in exports. Later in 2010, the macroeconomic policy stance also started to “normalize”. I guess many of us use the word “normalization” to describe or prescribe a macro policy stance that would be in line with the “normalized” economic outlook, as opposed to a particularly tight stance.

The rapidly rising economic weight of developing countries – now in its third decade, rather than a product of the crisis, is notable for several interrelated developments:

• Developing economies as a whole have been growing faster than advanced economies since the 1970s, on both aggregate and per capita terms. (Read more about growth poles - .pdf)

• The margin between these growth rates has risen of late, although growth paths have become more synchronized. Decoupled in trend terms, more coupled in cyclical terms? (There is an abundant discussion of “decoupling”: see one example here and one here)

A couple of weeks ago the Bank released its half-yearly economic assessment of developing countries in the East Asia and Pacific region. The report confirmed the robust recovery of the region's economies overall, but flagged a number of emerging risks, particularly around the return of large capital inflows and appreciating currencies.

The Chief Economist for the region, Vikram Nehru, and the Lead Economist Ivailo Izvorski will be live online in just a few hours, November 2 at 10 a.m. EST (14:00 GMT and 10:00 p.m. Beijing time) to answer your questions on the issues presented in the report. It's always better to submit a question in advance to have a better chance of having it answered, so do send your questions --and/or follow the live chat-- here.