Asia: An astonishing rebound?
There are timid signs that the Asian economies are coming back to normal, although some doubt China’s overoptimistic statistics. Were the books cooked to make it look good and encourage reinvestment?
The four emerging Asian economies which have reported GDP figures for the second quarter (China, Indonesia, South Korea and Singapore) grew by an average annualised rate of more than 10% (see article). Even richer and more sluggish Japan, which cannot match that figure, seems to be recovering faster than its Western peers. But emerging Asia should grow by more than 5% this year—at a time when the old G7 could contract by 3.5%. Western politicians should brace themselves for more talk of economic power drifting inexorably to the East. How has Asia made such an astonishing rebound?
Out of smoke and mirrors, say some Western sceptics. They claim China’s bounceback is yet another fake. The country’s numbers are certainly dodgy: the components of GDP do not add up, and the data are always published suspiciously early. China’s economy probably slowed more sharply in late 2008 than the official numbers suggest. But other indicators, which are less likely to be massaged, confirm that China’s economy is roaring back. Industrial production rose 11% in the year to July; electricity output, which fell sharply last year, is growing again; and car sales are 70% higher than a year ago.
