CHINA’S ECONOMY IN 2012

WHY CHINA'S ECONOMY WILL GROW STRONGLY IN 2012

John Ross

China.Org, December 31, 2011

As 2011 draws to an end, it is a suitable moment to look at China's economic prospects for next year. The overall perspective is clear – China's economy will continue to grow strongly, remaining the world's fastest growing major economy, and it will outperform Western pessimists predictions on the upside. This is overall the same prediction this column made for the last two years and results showed this to be factually correct - as opposed to the opposite perspective. Given accurate or inaccurate predictions do not depend on the personal characteristics of those making them, but of different fundamental analyses, what therefore leads to such repeatedly correct and incorrect projections regarding the growth path of China's economy?

The core issue is simple but difficult for many non-Chinese analysts to admit, despite constant confirmation by the facts and repeated falsified predictions of serious slowdown. The core is that statements by Chinese analysts that China has a stronger economic structure to the US and Europe, and that this therefore produces stronger economic performance, is not a boast but actually factually correct. As this stronger character of China's economic structure is not understood by many Western analysts, they therefore systematically, and each year, underestimate China's economic growth potential. However as a difficulty for non-Chinese analysts is that sometimes explanations of this economic strength are posed solely in terms of specifically 'Chinese characteristics,' it is therefore worth spelling out more generally why China has a stronger economic structure than the US and Europe, and how this relates to economic issues that will be faced in 2012.

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