China’s GDP increased 11.9% in 1st quarter of 2010, from last year. China is now the 2nd largest economy (overtaking Japan in the last year). More cars will be bought this year in China than any other country (they overtook the USA in 2009). The 4th quarter of 2009 saw an increase of 10.7% above 2008. Real estate appreciation continues and the government reported housing prices in 70 major cities rose 11.7% in March compared to 2009. I believe it would be wise for China to take stronger action to deflate a bubble. Raise rates. Cut back on infrastructure spending. Raise the value of the Yuan.
March’s China consumer price index was 2.4% higher than a year earlier, while the producer price index was up 5.9%.
China’s economy feels the heat by Robert M Cutler
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The government has held its overnight interest rate steady at 5.31% since January 2009.
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The government has already moved to slow the real estate market through higher mortgage rates and required down payments and the re-introduction of sales taxes.
The ministry of housing and urban-rural development has said it intends to crack down on price speculation in the property market and curb attempts to hoard land. Measures being considered include requiring a down payment of 40% on second residences
Related: China GDP up 8.7% in 2009 – China Forecasts 9.6% GDP Growth, Close to Becoming 2nd Largest Economy – Capitalism in China
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