China feels that as in the next ten years it must urbanize another 300 million people, it has no choice but to grow, even if it means making bad economic decisions:
https://www.washingtonpost.com/news/wonk/wp/2016/01/08/the-country-that-tricked-the-world/China’s stock market took a breather Friday after plunging this week, pulling global markets down with it. But the financial turbulence rocking China has brought to the surface a deeper fear: That its economy is sinking, and that its downfall will derail the still-fragile economic recovery going on in other parts of the world.
What makes those fears worse is that few people have a good understanding of how well China’s economy is really doing. The country’s official growth figures paint a rosy picture that any country would aspire to: In the third quarter, China said its economy expanded 6.9 percent from the previous year, far above U.S. growth of 2 percent.
But how much should we believe those figures?
“Not a lot,” says Mark Williams, the chief Asia economist at Capital Economics, a research consultancy based in London.
“They are absolute make-believe,” says Leland Miller, the president of China Beige Book International, which compiles private surveys on the Chinese economy.
China’s economy has been gradually slowing from the double-digit rates it recorded in past decades, due to a variety of factors, some of which are the inevitable result of many years of fast growth, and some of which are not. But experts widely disagree on exactly how much the economy has slowed. While some analysts estimate the growth in China's gross domestic product (GDP) at as little as 1 or 2 percent, other estimates are higher, even if not as high as the country's official read.
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So the setting of a relatively high target of 6.5 percent growth for the next five years – a time in which economic forces are likely to continue to drag on China’s economy – suggests that we could see a lot more fiddled growth figures to come.
“I think that the only way that China will be able to hit its targets over the next five years would be in the short term to pursue some very undesirable stimulus policies, which would only create bigger problems down the road, or by faking the numbers,” says Williams."