After the Roaring Twenties?


Chinese GDP rose by a staggering 1,100 per cent between 1992 and 2010. The global share of goods exports grew from 2 per cent to over 17 per cent. Income per head rose 970 per cent, 10 times faster than in the United States. A full half a billion people were lifted from rural poverty to middle-class comfort. No country in history has accomplished so much in so short a time for so many people.

When I stood on Jingshan in 2010, it was widely assumed that this meteoric rate of growth would continue – we were entering China’s decade – the decade when China’s economy would become bigger than the US’.

One of the lessons of investment, however, is that just when things are looking their best, the best may be over. The Shanghai Composite Index, the stock market and bellwether of an economy reflecting 8½ years of economic activity, is actually down 17 per cent since January 1, 2010. The yuan is also weaker against the US dollar. It reminded me that a full four years ago, I mused in these columns that the 2010s might be China’s lost decade, so as an update, I surfed the International Monetary Fund and World Bank databases.

The data shows Chinese annual economic growth has fallen from the over 10 per cent per annum to around 6 per cent this decade.

Interesting. When we saw Shanghai 6000 eleven years ago, we compared things to the Roaring 20’s in the US. Maybe we were more correct than we thought.

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