Economic powerhouse China reports slowest growth in three years
China viewed as one of the few motors strong enough to power global economy
China is generally seen abroad and at home as one of the few nations
that can currently maintain steady economic growth. With worrisome
economic numbers out of the European Union and the United States, China
is viewed as one of the few motors strong enough to power the global
economy through the current economic hard times. The world economy has
just been handed another bad bit of news, as China has reported its
slowest growth in three years.
Recent figures serve as another reminder that China's economy is slowing faster than the government had hoped.
According to the National Bureau of Statistics, Gross Domestic Product grew at a 7.6 percent rate in the second quarter of 2012, down from 8.1 percent pace in the first quarter and marking the sixth consecutive quarter of slowing growth on the mainland dating back to 2009.
The figures serve as another reminder that China's economy is slowing faster than the government had hoped.
The ruling Communist Party in Mainland China has seemingly staked its legitimacy to an unspoken pact with its citizens: give up some social freedoms for continued economic prosperity.
"For the past 30 years, the Communist party derived a lot of its legitimacy from delivering the goods: better economy, better living standards," Patrick Chovanec, a professor of economics at Tsinghua University in Beijing says. "If the perception is that's changed, then it introduces a real element of uncertainty."
Global trade in 2008 ground to a halt and the country lost nearly 20 million jobs. Beijing responded with a $635 billion stimulus program that opened up lending from Chinese state banks.
The move helped successfully spurred growth across the country as local governments went on construction frenzy from new ports and airports to ambitious housing developments.
The extravagant loan, which chiefly benefitted state-owned enterprises with shady accounting practices, may have helped foster the environment for today's economic slowdown by providing a potential crush of bad loans that might very well batter the economy.
"In 2008, the big problem was external, a slowdown in exports." Chovanec told NBC News, "This year the problem is internal. It's bad debt, and the burden the bad debt is placing on the economy."
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: China, economic growth, slowdown, economic stimulus
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