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Slide Notes

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china's economy

Published on Nov 24, 2015

China's economy in three parts (as of 4/2014).


china's economy

in three parts
Photo by andy castro

2013 to now

  • China’s economy grew by 7.7% in 2013
  • Manufacturing fell for the fourth month in a row
Photo by IvanWalsh.com

China's three forms of growth

  • Supply
  • Demand
  • Credit


Diminishing economic power?

  • Recent teports show supply-side limits are tightening
  • Urban workforce is growing more slowly
  • Working age population shrank by 2.44m in 2013
Photo by mikecogh


losing steam

  • GDP surpassed government’s minimum threshold of 7.5%
  • Consumer prices rose by only 2.5% in 2013
  • Prices paid to consumers are steadily dropping


Photo by iujaz

credit imbalance

  • Financing grew 20%
  • Nominal GDP grew by only 9.5%
Photo by dcmaster

1. fruitful spending

  • Capital increases production capacity
  • Adds to both demand and supply
  • Results in higher economic growth

2. wasteful spending

  • Wasteful consumption or misconceived projects
  • Credit results in higher inflation
  • Increases nominal GDP, not real GDP
Photo by Claudio.Ar

3. speculative spending

  • Invest in existing assets
  • Not included in GDP
  • Credit, asset prices rise; consumer prices remain flat
Photo by i k o

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not all bad

  • Rebalancing of incomes and production
  • Migrant workers, rural households saw incomes grow

2014 and beyond

  • Shift in production
  • Services surpassed industry
  • Will this prove the optimists right in 2014?
Photo by PTorrodellas