Monday, August 20, 2007
Debate on Chinese growth
One of America’s most prominent economists has questioned China’s rapid growth rates. Lester Thurow, a professor at the Massachusetts Institute of Technology, argued in yesterday’s New York Times that China is growing at less than 4% a year rather than the 10% official figure.
He gives three reasons to support his argument:
* Official figures show that the countryside is not growing at all.
* Chinese statistics contradict those from Hong Kong.
* If China’s economy was growing as fast as claimed its electricity use would be growing even faster than it is.
Today Capital Economics, a respected consultancy based in London, put out a paper countering Thurow’s claims. Taking each in turn it argues that:
* Thurow is simply wrong on the rural growth figures.
* There may be some merit in Thurow’s second point.
* Thurow’s point on electricity ignores that fact that China has shifted from a centrally-planned industry to more efficient manufacturing and services.
He gives three reasons to support his argument:
* Official figures show that the countryside is not growing at all.
* Chinese statistics contradict those from Hong Kong.
* If China’s economy was growing as fast as claimed its electricity use would be growing even faster than it is.
Today Capital Economics, a respected consultancy based in London, put out a paper countering Thurow’s claims. Taking each in turn it argues that:
* Thurow is simply wrong on the rural growth figures.
* There may be some merit in Thurow’s second point.
* Thurow’s point on electricity ignores that fact that China has shifted from a centrally-planned industry to more efficient manufacturing and services.
Labels: china, development, economics
