China’s True Growth: No Myth or Miracle -- September 2006

China’s True Growth: No Myth or Miracle -- September 2006

A nice and sensible artice on the Chinese economy. It puts the Chinese expansion in the correct perspective. The growth in the Chinese economy is not unprecedented, it is exactly like the growth in the Japanese economy, or like the growth in the Asian economies of South Korea, Taiwan, Hong Kong, and Singapore. High savings rate leads to high investment, which in turn fuels the growth. The Chinese economy is nothing new even in terms of its size also. The impact of the Chinese growth on the world economy will be exactly like the impact of the Japanese growth or the Asian tigers' growth. Next country to watch is India. Savings rate are on the rise, and it is fueling a China like growth in India. India is now at a stage where China was in the late 80s. Rising wage in China will prove to be a catalyst for the growth in the Indian manufacturing sector.