China's economic growth drops to 13-year low
This picture taken on January 17, 2013 shows laborers working on the tracks at a railway station in Qingdao, in eastern China's Shandong province. China's economy grew at its slowest pace in 13 years in 2012
China released its 2012 figures for economic growth this morning. It was a mixed bag: The official GDP hit 7.8 percent, but it was the slowest growth since 1999.
"This year the slower growth has really been noticeable," says Marketplace China bureau chief Rob Schmitz. "On the ground in China, this past year, was really the first time we started to see things like stockpiles of steel sitting at port, going nowhere. Construction was at a hault."
While 7.8 percent GDP growth may sound like a strong year in comparison to the U.S. economy, it's not enough to sustain a rapidly developing nation like China where hundreds of millions of people live on less than two dollars a day, says Schmitz.
Concerned about the sagging economic figures, the Chinese government is turning to a familiar method of stimulus: building. But Chinese consumer spending remains way down, which worries many economists, like Anne Stevenson-Yang.
She breaks down the Chinese government's unbalanced approach to economic stimulus in a more colorful way. "In the eighteenth century, there were a whole bunch of scientists who were trying to find out how life was animated, and they used to put dead frogs on the operating table and shoot electric currents through them, and watch them jump," explains Stevenson-Yang. "That's what they're doing to the Chinese economy."
But other economists assert that China's strong last quarter is a good sign.