China’s economy doubling every 6 years; hopefully the IHT will write about it well by then

Caught this story in the IHT (on my mobile phone, waiting for my wife’s bus). I think it might actually be a New York Times story. China’s economic growth is hardly news. Here the story is that we’d been told to expect 8% but got 11.5%. I never believed in 8% anyway, seeing it as more an estimate by the Chinese designed to assuage our angst for a few months, which it did. What struck me was how poorly the story was written.

China said Thursday that its economy grew 11.9 percent in the second quarter of this year, the fastest pace of growth in more than a decade, and that inflation rose sharply, reigniting fears that the economy was overheating.

The explosive growth was fueled by a huge trade surplus, booming retail sales and immense investments in new factories, roads, bridges and real estate projects.

The use of the phrase “China said…” is okay, I guess – but re-igniting fears that the economy is overheating? Leaving aside terms overdone like “re-igniting”, when did those fears go away? Here’s a picture from an old Treasury Select Committee in the UK:

China economic growth

Which is why China will be 3rd in the World’s economies, soon enough (over-taking Germany).

Members of the U.S. Congress are trying to put greater pressure on China to revalue its currency and import more American goods to narrow the trade gap between the two countries.

Congress is putting pressure on the Chinese government to import more US-made goods? How is that supposed to work, exactly?

Another concern arose Thursday when the government announced that inflation had reached its highest level in years, with the Chinese consumer price index jumping 4.4 percent in June, almost entirely because of rising food prices.

The prices of eggs and pork have risen more than 20 percent in the past year largely because of tighter grain supplies and the outbreak of blue-ear pig disease, the government said.

Many analysts have said inflationary pressure could be even greater when measured by a broader basket of goods, and that this could signal big problems for the country, particularly if food prices continue to rise.

So, inflation with food prices is bad for China, but not ‘core’ for the US?

The government has already used dozens of measures over the past few years – including interest rate increases – in an effort to slow the economy, moderate export growth and tame a wild stock market.

But most of them have failed, or achieved only moderate success. Instead, the economy has roared ahead, unperturbed by attempts at intervention.

That’s just…if this author has a crystal ball, showing him what would have happened without the contractionary policies of the Chinese government, could he use it to tell us when the war in Iraq is finally going to be over? I’d appreciate it.

One cool move to which the article does refer is this:

Gong, of JPMorgan, said China was already signaling that it would allow its currency to do just that. He said China should import more agricultural products from the United States, which might help ease the trade deficit and constrain rising food prices.

With food prices going the way they are, that’s not a bad idea – economically and politically, it’s a good move. What it might do to also-increasing food prices in the US will depend on exactly what China makes a move for. Imagine the US government pushing legislation for even higher subsidies for agriculture, to stop farmers exporting to China. A universe would have to implode, somewhere, surely, to balance out such un-reality.

Anyway. I realise the New York Times is lousy, and it’s hardly an economics or business newspaper, but they can do better than this. It’s so careless. Or maybe it’s me, and my old-fashioned insistence that words mean something.

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