January 20, 2014

Why China's Economy Grew 7.7 Percent in 2013

Gwynn Guilford, Quartz

The Associated Press

China is the only major economy in the world to set a hard target for economic growth, and the latest GDP figures released today show precisely why it’s a bad idea. + Fueled by a huge surge in government “mini-stimulus” lending in the second half of the year, China’s GDP increased by a higher-than-expected 7.7% for 2013 (link in Chinese) according to the National Bureau of Statistics. That might sound like a good thing, but it’s not: essentially the government freaked out at the prospect of missing its 7.5% target, and overshot the mark. + The consequences—especially for China’s attempts to reform its economy and limit the amount of debt that its businesses and local governments are taking on—could be ugly.

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TAGGED: China

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