huangthomas

Will U.S. Growth Beat China's in 2009?

The latest figures available from World Bank (2005) indicates Chinese are still very poor. Their per capita income (per capita GDP, all adjusted for purchasing power parity, PPP) is slightly less than half of world average and at par with Sub Saharan countries such a Namibia, Botswana.....and way below South Africa, Egypt.......etc. How these poor people are going to respond to a set of economic policy is every-one's guess. Do they respond to lowering interest rate by going out to buy a Cadillac?

The Chinese policy makers are well aware of this. That is why they are subsidizing and financing the purchase of electric appliances, especially in the country side where the poor concentrate. This will also sooth the feeling of unemployed poor. Construction of low income housing will also benefit the poor and warm up economy. American may not understand all this and look at the policy as something strange and less than transparent.