China’s Growth Endangering Itself

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There have long been fears in the West, especially in the United States, of China’s growing economic power. In recent years that fear has excellerated because of an incredibly high GDP growth rate in that nation. The current growth rate is the highest it has been since 2007. However, there has been some speculation that this rapid growth could be reckless and dangerous to the Chinese economy. The gross domestic product rose 10.7% since this time last year, an incredible growth rate.

This news could effect long term policy for the central bank in China.

“Today’s data suggest that tighter policy is just around the corner,” said Brian Jackson, a Hong Kong-based strategist on emerging markets at Royal Bank of Canada. “Policy makers will need to move soon to stop the economy from overheating,” he said, forecasting officials will end an exchange-rate peg and boost interest rates starting this quarter.

More here.