This chart is remarkable. Even if China cooks its books, as is alleged, the country doesn’t seem to have had a recession in the last 30 years. GDP growth briefly dipped in 2009 to 6% or so, but is back around 10% again. To our knowledge this longevity of rapid growth without a recession is unprecedented in the history of major developing economies. (There are some anomalous growth rates in the early part of the chart that are due to China’s GDP being almost non-existent during the Cultural Revolution.)

We have seen numerous predictions that the China bubble will burst. So far it is the naysayers and their predictions that have blown up. Recently there has been an increase in the pace at which Chinese citizens are diversifying their real estate holdings into other countries. And CIC, discussed many times in this space, is once again getting active in investing in the United States. Do these activities mean anything about the timing of a slowdown in China? They haven’t so far.

Someday China will have a recession, because things that can’t go on forever, don’t go on forever. Questions: (a) when might there be a recession in China? (b) when a recession eventually arrives, will its causes be as obvious as those that have caused the Great Recession in the US and the West?

This entry was posted on Monday, November 15th, 2010 at 11:26 pm and is filed under business, China, Democrats, EU, General, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.