Is China’s slow growth estimate a bad thing?

Rob Schmitz Mar 6, 2012

Bob Moon: Did China just sneeze on the global economy? Investors got the shivers yesterday, when Beijing forecast cooling economic temperatures.

But our China correspondent Rob Schmitz found decidedly less concern.

Rob Schmitz: Across the developed world, headlines spelled out economic doom. “Is China’s Role as Global Growth Engine Over?” one asked. Analyst Andrew Batson works at Gavekal-Dragonomics in Beijing.

Andrew Batson: I think having a slightly slower rate of GDP growth actually addresses the issues that people are worried about.

Issues like: why is the government investing so much in building stuff when Chinese people, compared with those in the developed world, aren’t buying much? China’s central planners have modified their growth predictions for China’s economy to 7.5 percent this year. They hope this will rebalance the economy and give more people here the opportunity to buy more stuff.

Batson says it won’t be easy. The concern is if growth in investment begins to slow down, it could be a huge shock not only to China’s economy, but to the global economy.

In Shanghai, I’m Rob Schmitz, for Marketplace.

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