China’s growth starting to cool
TEXT OF STORY
Steve Chiotakis: China is one of the few countries left still growing, but that growth just hit a speedbump. Numbers out today show its economy grew 9 percent last year — that’s down from 13 [percent] the previous year, and cooling rapidly. From Shanghai, here’s Marketplace’s Scott Tong.
Scott Tong: Nine percent annual growth might not look so bad, but in the fourth quarter, China’s growth fell to 6.8 percent. Beijing has committed some $600 billion in stimulus, including subsidies for exporters. The question is, will Washington view it as protectionist?
Arthur Kroeber of Dragonomics says Beijing has to address that issue:
Arthur Kroeber: I think what we’re looking for is a clear commitment that they will not engage in competitive devaluation or other efforts to pump up their economy by exports, ’cause that wouldn’t be helpful.
So that’s what China needs to do. It’s also up to the Obama Administration to define its relationship with China.
Kroeber: Do they view the economic relationship broadly? Or do they focus on one or two issues, like the exchange rate?
As the two sides watch each other, the trade pie shrinks. The World Bank expects global commerce to contract this year for the first time since 1982.
In Shanghai, I’m Scott Tong for Marketplace.
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