CHINA'S economy was 10.7% larger in the fourth quarter of 2009 than it was a year earlier, a rate of growth that beat estimates. In December, industrial production grew 18.5% and retail sales increased 17.5%. Based in part on China's performance, that World Bank revised up its expectations for global growth in 2010, from 2% to 2.7%. And if Chinese growth maintains this pace, China's economy may surpass Japan's to become the world's second largest.
Of course, the government economic supports that helped produce this recovery haven't come without some side effects:
Banks lent out US$14.58 billion in new mortgages in Shanghai in 2009, a 1,600% increase from the previous year, the South China Morning Post reported. Of the total, US$5.7 billion went to buyers of new properties and US$8.88 billion to those buying second-hand properties, according to the People's Bank of China. Average prices of Shanghai homes rose 68% from 2008.
The government is aware of the potential problems here, and is beginning to take measures to rein in credit growth.
The Conquest of Northern Idaho
6 minutes ago