By the time a government releases gross domestic product numbers, they’re ancient history. That proved true again today, after China announced its economy had expanded 7.3 percent in the fourth quarter, making 2014 growth the slowest since 1990. Within hours, attention had moved on to another figure released today: 6.8 percent.
That’s the International Monetary Fund’s lowered forecast for Chinese growth this year. The number quickly had analysts buzzing about additional stimulus from Beijing — on top of a recent $1.1 trillion package — in order to maintain growth around 7.5 percent (it was 7.4 percent in 2014). That’s the last thing China needs if it’s to recalibrate the economy away from excessive investment and debt.
Fortunately, buried within today’s GDP numbers are others that suggest Chinese leaders should be able to withstand the slowdown the IMF is predicting. Most importantly, China’s Gini coefficient, a measure of a nation’s rich-poor gap, dropped for the sixth straight year — a telltale sign that the benefits of growth are spreading more widely. At 0.469 in 2014, China’s reading is still in the range that University of Michigan researchers consider “severe,” putting the country at risk of social instability. What’s important, though, is that we now have a convincing track record of progress.
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