Friday, March 6, 2009

China and it's 8% growth.

Surprisingly, due to the definition of GDP, it actually IS possible, even quite likely that China will experience very good growth figures for 2009.

This is because GDP is includes +exports, - imports. Basically, when exports go up, GDP goes up, when imports go up, GDP goes down. Not immediately intuitive, but it makes sense if you look at the diagrams.

Anyhow, because China's Exports dropped 18%, but it's IMPORTS fell by 43%, that means that China's GDP is rising.

Of course, this isn't going to help the rest of the world overcome recession, that 43% drop in imports means A LOT... in fact, this means that a lot of countries that were relying on China to buy their products are now getting slaughtered.

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