The Economy. Home & Away.

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As international expectations for China as an economic saviour continue, we continue to watch what is going on with the economy (in fact the many and varied regional, rural and urban economies…) in China.

As the news below points out, the China bulls are running again, with GDP growth now estimated to exceed 10% in Q4. It is now clear that – the power of policy behind it – China will exceed its 8% growth target for the year.

It is also clear that much of this growth is coming from the fiscal stimulus policy introduced last year – much of which is being fed by bank lending (up 23.6% in September).

What is not clear, is how far the banks are opening themselves up to future risks, and how far the growth (mostly from investment in fixed assets) is sustainable. The long-term goal remains a rebalanced economy, with the emphasis moving to domestic consumption and away from exports as the driver. How the stimulus funds, and the eventual exit from stimulus spending, is managed will be critical.

But what is happening at home is only half the story. China’s internationalization drive is also moving ahead. The past week has had a lot of news about China’s policy (and loans, and investment, and influence) in Africa. This is big strategy at work, and it is going to be a major story – politically and commercially – for a long time to come.

On the other hand, China’s engagement with the developed world – and especially the US – is also under the spotlight. While a bit of a China-US trade spat is emerging over protectionist policies and trade tariffs, China is again dipping its investing toe into the US. This time taking a more subtle approach than with the ill-fated Unocal deal, and it will be interesting to see how it works out.

News sources:

• GDP RT @CSDTrippon: China’s economic growth to exceed 10% in Q4: 7:51 AM Nov 3rd

• Up 23.6% on Sept. RT @China_Daily: Big 4 banks Oct new loans hit 136b yuan 8:03 AM Nov 3rd

• Making progress RT @chinaherald: China’ PMI of non-manufacturing sector rises to 62.1% in Oct. – Xinhua 7:20 AM Nov 4th

• ODI, slowly does it RT @aimeenbarnes: Very interesting: “CNOOC Dips Toes Into American Waters” 8:27 PM Nov 5th

• China to Africa: Loans, trade, energy, agriculture, health, education, S&T, culture… – China’s promises to Africa

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