Thursday, April 15, 2010

Chinese Boom Update

Confirming again what I've written about how the global recovery is stronger in Asia than elsewhere, China posted strong numbers today. GDP rose 11.9% in the first quarter compared to a year earlier, while both industrial production and retail sales rose 18% in March.

Chinese money supply growth meanwhile dropped to 22.5% in March (down from 25.5% in February, and nearly 30% in late 2009), indicating that the Chinese central bank is having some success in tightening monetary conditions. If this downward trend in money supply growth continues then economic growth could slow down in the near future, but since growth would be sounder with less malinvestments, that would in fact be a good thing.