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Steve Chiotakis: New numbers this morning from China, where the country estimated its economic growth rate at 10.3 percent. To show you how fast China’s growing, that means GDP is actually down 1.5 percent
from the first three months of the year. It’s just another indication that China’s efforts to cool down its economy seem to be working. Marketplace’s Rob Schmitz reports from Shanghai.
Rob Schmitz: Most countries would be full of glee if their economies were growing at a rate of more than 10 percent. But not China.
Tao Wang: Is this a prelude to a soft landing, or has a risk of a hard landing increased?
Tao Wang is the head of economic research in China for the bank UBS. Like many economists, she’s been a little worried about the break-neck speed of economic growth here last year. An overheated Chinese economy could short circuit the already-frazzled global recovery, possibly sending the U.S. and other countries back into recession.
Here in China, many in the growing consumer class were also biting their nails. They were nervous they had bought into a property bubble. Today’s lackluster numbers — yes, 10.3 percent passes for lackluster in China — should help ease some of these concerns.
It’s becoming clear that government policies that tightened credit have helped cool down this overheated economy. Tao predicts China’s GDP growth to be down to a measly 8 percent by the end of the year. That would constitute a soft landing for the economy, and it might also help economists unwind a little.
In Shanghai, I’m Rob Schmitz for Marketplace.
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