The global economic crisis drove Chinese growth down to 6.1 percent in the first quarter of 2009. But rapid economic growth has returned ,and the economy grew by 8.9 percent in the third quarter. However, underlying data don't fully support that.
Official long-term forecasts are that the fast-paced growth for China’s economy will continue. The International Monetary Fund expects 7.5 percent to 10.7 annual growth over the next five years.
Moody's, one of the ratings agencies that failed to spot the credit crisis that crippled the global economy in 2007, recently raised China’s credit rating outlook from “stable” to “positive.”
That upgrade came with praise from Moody’s which said, “The Chinese authorities are successfully steering the economy through the turbulence of the global financial crisis and recession, and furthermore, they seem likely to remain vigilant to protect systemic stability from future threats and challenges.”
More support for the upgrade comes from the Chinese Ministry of Human Resources and Social Security, which tracks unemployment. At of the end of the third quarter, China’s unemployment rate stood at 4.3 percent, near the level at which it started the year.
But just like the U.S. unemployment report, the interesting stuff is found in the details. There are officially 9.15 million unemployed people in China’s urban areas. This figure raises a question.
China’s population is estimated at almost 1.5 billion, nearly five times the U.S. population. The estimated urban population is 600 million, but the unemployment rate indicates a workforce of about 200 million in the government records.
In the much larger U.S. economy, there are 15.7 million unemployed.
There are other indications that China’s reported economic growth may be a little high, but the relatively low number of unemployed shows that something just doesn’t add up.
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