Asia Insights Weekly: Is the Chinese Economy Really Growing?

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January 22, 2013       Your Weekly Update from The Heritage Foundation's Asian Studies Center Chinese Growth, GDP, and Other Things the U.S. Should Doubt By Derek Scissors, Ph.D. The first question regarding China’s newly released economic numbers is not how fast the People’s Republic of China (PRC) grew last year. Rather, it is whether stars are aligned for the State Statistical Bureau (SSB) to provide accurate information about GDP and more useful measures, such as household consumption. Answer: to some extent. The Chinese economy is undergoing a cyclical recovery and the SSB can honestly report a noticeable improvement. There are two large qualifiers to this happy statement. First, the SSB never provides much valuable information due to political imperatives and flaws in GDP accounting itself. Second, the recovery is cyclical, not structural. The PRC’s economy structurally weakened under Hu Jintao’s outgoing government and, until market reform restarts, slow weakening will continue. Chinese data do not reflect this weakness and, therefore, incentives at work in Beijing. The U.S. needs its own measurements of China’s economy as the first step toward better policymaking. Are the Chinese statistics really accurate? Find out here. >>

Japanese Prime Minister Serious About National Security Japanese Prime Minister Shinzo Abe has been in office less than a month but is already showing that he means business on addressing his country’s security needs. The Abe administration announced it would increase Japanese defense spending, reversing an 11-year trend of consecutive defense budget cuts. Cooperation with the U.S. military is next. >> Human Rights Atrocities Still Exist in Burma Over the past month, violence between the Burmese government and the Kachin, a small Christian minority group, has escalated. Within the last week, three people were killed and at least four were wounded amid destruction that has displaced nearly 100,000. The violence is the latest episode in the ongoing conflict since Burma broke the cease-fire agreement that had held since 1994. Find out what Congress should do. >>

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