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China’s Stimulus Lifts Its GDP

Posted on Jul 16, 2009
Flickr / clayirving

Just when we were settling into the idea of a worldwide recession, China has reported its second-quarter growth rate at 7.9 percent. The People’s Republic has issued twice as much in new loans as the U.S. this year and, thanks to a $585 billion stimulus package, confidence and continued strong economic activity reign. However, some experts see problems with the Chinese model down the line.

The Wall Street Journal:

China’s government has turned around its economy far faster than most thought possible, as officials said Thursday that growth accelerated to 7.9% in the second quarter.

Even if the surge moderates in coming quarters, many analysts say China will very nearly meet its target of an 8% expansion for all of 2009. In the first quarter, gross domestic product grew 6.1% from a year earlier.

The Shanghai stock market’s benchmark index has gained 75% this year as the Chinese outlook has improved, with factory output, bank lending and commodity imports all continuing to accelerate in the past few months. Now, authorities face increasing questions about how long this growth can last, and how quickly the world’s third-largest economy can be weaned off its massive stimulus before longer-term problems take root.

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By Folktruther, July 17, 2009 at 8:11 am Link to this comment

Thanks for your account about China, Xntrk.  It is consistent with the account of other Americans who have traveled there.  The smog, the dirt, the garish inequality, the primitiveness, all impress Americans and probably other Westerners.  In that respect it is like India, Vietnam or Asia generally.

But one has to look not only at what it is, but what it is becoming.  It is in the process of urbanizing, which has been horrible in the West as well as the East.  The sweatshops, the long hours for low pay, the arbitrary brutality of the rich, all take place in a densely populated region, making it more visible and more horrible.  Polls have indicated that the masses of people approve of the direction that China is going, while in the US the masses of people think we are going the wrong way.
the uprisings in the West by both the Tibetans and Uighurs were orchestrated by the CIA successor, National Endowment for Democracy.  They take advantage of real griviences and national discrimination to provoke killing and violence for their own purposes.  It is the same kind of terrorism that the US is now funding in Iran in the north and south, blowing up mosques with people in them, shooting security people, etc.

If this doesn’t work, the US may escalate, since it is now threatening to bomb Iran.  The Busites got the US into military quagmires all over the world and Obama is expanding them. Should he do so with China, it will lead to nuclear war.

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By the tshirt doctor, July 17, 2009 at 7:22 am Link to this comment

Folktruther,  you stated “...the state owns the banks and does as their told.  In the US of course the banks own the state which does as its told.”

boy, that’s the truth.  and it’s going to be the ruination of the USA

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By Xntrk, July 17, 2009 at 12:10 am Link to this comment

I spent a month in China in 2006, and I disliked most of it. The filth, waste and overcrowding were unbelievable. China may call itself a ‘Communist’ Country, but it is anything but!

Mao’s little red book mentions China’s attraction and abilities pertaining to Capitalism. Mao said it would take ‘generations to wean the Chinese from Capitalism” True, the entire society is fascinated by ‘buy and sell’, and Mao wasn’t in charge that long.

If you doubt that, take a ‘Conversational Chinese Class at your local Y or whatever. The first class introduces two words Mai and Mai, with different accents of course, and that’s beyond my keyboard. One means Buy, and the other means Sell, put together they form ‘Business’ Along about class 3, we were discussing visiting with strangers in China: “I REALLY like your watch!”; Visitor ” Thank you”; Chinese “No, I really like it, Was it expensive?”; Visitor, “Not too…”; Chinese, “Can I buy it?” You get the drift, none of the “The pen is on the table” of French, or “my name is Joe, What is your name?” of Spanish. The Chinese just cut to the chase and get down to business.

Beijing, where I spent 2 weeks at Peiking University wasn’t too bad. Crowded and dirty, but fascinating, if you don’t mind crowds. Once we started traveling to the country side, following the sacred sites of Confucius and his primary assistant Menchius, it became apparent that the economy was a two level or maybe ten level beast. The farms were at best on the level of the US in the 20’s, with lots of hand labor - but they have lots of people. And, the Cooley carrying goods and people up mountains on his back is very much in evidence at the mountain shrines. Not every kid goes to school there, that is for sure. The schools are in pretty poor shape too for that matter, out in the villages.

And, let’s not discuss hygiene, and toilets etc. If you wander off the tourist hotel route, they are nightmares. Train travel is yet another adventure… Slit toilets on a swaying train require more agility than this old lady could handle, frankly.

Shanhai was an eye opener, with its malls and Bund, and fancy eateries etc. Obviously the ‘Pearl of the Orient’ when it comes to commerce. But on a River tour, I was horrified to see an overloaded garbage scow being towed UP river to be dumped. It did explain the absolutely filthy water in the river though, with visible garbage floating downstream. We were told they pull several bodies out daily.

The recent uprisings in Western China should not be dismissed. I think the Communist Government is on the verge of yet another peasant uprising with the increasing divide between the urban cities and the peasant countryside. These are very smart, even greedy people. They are not going to be satisfied with selling their children into the sweat shops so the Capitalist Cosmopolitans can live the good life. The government is busily feeding a real estate boom by moving the farmers off their lands and selling it to developers. Sound familiar?

The scandals over tainted exports are only more evidence of an economy that has slipped lose from the ham-fisted political bosses. Money will buy you anything in China!

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By Folktruther, July 16, 2009 at 11:30 pm Link to this comment

Fascism, Paul, united capitalists in a more centralized system and ended the depression by going to war. As the US did.  China eliminted their capitalist class, nationalized the economy, than de-nationalized parts to create a new bourgeois class.  Instead of going to war, they built new infrastructure and cities, urbanizing the population.

However, your comment was a highly patriotic one in relation to the American mainstream truth, relying on the customary ignorance of Americans for anything deviating from American capitalism.

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By yours truly, July 16, 2009 at 9:15 pm Link to this comment
(Unregistered commenter)

China’s response to the worldwide recession tells us what might have been here in America, if only we had public ownership of banking and finance.  What’s it going to take?  Our rising up en masse, that’s what.

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By paul, July 16, 2009 at 8:37 pm Link to this comment
(Unregistered commenter)

to Folktruther “It doesn’t yet have any accepted name and is often called ‘socialism.’  It’s a kind of party capitalism, modeled to some extent on the feudal mandarins who guided the Chinese state historically. “
- this system has name and the name is fascism. You know how fast German fascism end depression, China follows exactly the same recipes. The only our concern should be whether they also will follow the path of aggression? My hope is that they will be peaceful for a while.

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By Folktruther, July 16, 2009 at 12:07 pm Link to this comment

It’s puzzling why the Wall Street Journal, New York Times and Truthdig are telling the truth now about the Chinese economy when the US truth consensus lies so continuously about the US economy.  As Paul Craig Roberts has stated, a former US asst tresurer, the unemployment, inflation and growth indexes are largely faabrications.  I suppose that there is such world interest in China’s amazing economic growth that it would be impossible to conceal it in the US.

The US econimic growth since the last quarter of 2008 is approximately -6%.  The low point of China’s growth was last quarter at +6%.  It’s stimulus for its economy was much largely than the US, the offical figures being deceptive in the usual way.  They can dump an enormous amount of money to build cities, transportation networks, and other infrostructure becasue the state owns the banks and does as their told.  In the US of course the banks own the state which does as its told.

The economy forms the basis of military expenditures, and the ideology legitimation of a power structure.  The economy thus forms the basis of world power.  Since the US can’t compete with China economically, it is emphasizing military violence to steal the control of oil from Muslim countries in the War on Terrorism.  This has been a power disaster, causing the US to lose world power much more rapidly than it otherwise would have.

China is currently edging cautiously past the US to take its place as the leading world power.  Don’t tell anyone, this is a secret in the mainstream truth in the US. Since 60% of the earthperson population lives in Asia, and another billion in Africa, China bordering the most populous countries, it can dominate the world while largely ignoring the power of the West. 

By dominating the Western pacific and Indian oceans, it can institute a cheap defense and concentrate on economic development.  That is the basis of its ‘peaceful rise’, rather than the wars that usually accompany a turnover of world power.

China is legitimating a superior form of capitalism than classic neoliberal capitalism and its offshoot, welefare capitalism. It doesn’t yet have any accepted name and is often called ‘socialism.’  It’s a kind of party capitalism, modeled to some extent on the feudal mandarins who guided the Chinese state historically.  They are concerned much more with power than they are with profit.  It is still an oppressive class system, but seems to be better for the world population, as was capitalism over feudalism.

So for an earthperson socialism to develop in the 21st century, it appears that China will be the major opponent, the US and the West rapidly sinking into the sunset.  The policies of the US are now destructive and dangerous, murderous actually, but when the power system collapses, the US might be a promising place to innovate new social forms.

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