JULY 9, 2001
Economic Trends
By Gene Koretz
A Golden Age for China?
Global economic data continue to disappoint. The U.S. is skating on the thin edge of recession, Japan and Mexico may already have made the plunge, and Asian economies are reeling from sagging demand for high-tech goods. Even Europe is fading fast, with German business sentiment at a two-year low.
If there's a bright spot in the blizzard of generally negative news, says economist Chen Zhao of The Bank Credit Analyst, a Montreal-based investment publication, it's the data emanating from China. "The Chinese economy," he says, "appears to be in the early stages of what could be a very potent boom."
China's domestic economy is robust. Consumption is picking up steam, and retail sales are 9% to 10% above year-earlier levels in real terms. (Inflation is flat after several years of deflation.) Low interest rates, wage hikes, and rising stock prices have pushed consumer confidence to record highs.
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