A Chinese Recession

Is 7.5% growth considered a recession? In China it is.

From the BBC:

The World Bank says China's economy will grow by less than expected next year, adding to the country's, and Asia's economic gloom.

China's economy is expected to grow by 7.5% in 2009, according to the Bank.

A few months ago, before the global financial crisis, it predicted the Chinese economy would grow by about 9%.

...

Until recently, China had largely avoided the effects of the global crisis because its financial system is insulated from the rest of the world.

But that crisis is now leading to a worldwide economic recession - and that will affect China.

If people across the world have less money to spend, they will buy fewer Chinese imports; that will lead to factory closures and job loses in China.

"So far [the crisis] hasn't impacted all that much [in China], but we will see that impact intensifying," said World Bank economist Louis Kuijs.

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Being a white American working and living in China, I have not had too much direct contact with the economic crisis the world is currently facing.

Although I'm only twenty-five years old and have a bachelor's degree in philosophy, I am ridiculously employable over here. Now I'll be the first to admit that having anything to do with ESL (English as a second language) teaching is not something I want to do for the rest of my life (even being a manager, which I currently am).

But it is not bad given the rest of the world's financial problems. I'm saving a (relatively) decent amount of money every month and live a very comfortable life.

Things are still going OK for us foreign devils here in China now, but I'm fairly pessimistic that things are going to continue to be like this for me and other foreigners forever.

I can't find the article doing a quick search for it now, but I recently saw an article saying that China must keep its growth rate near 10% a year or else it will begin to have social unrest and serious economic problems such as unemployment. It seems strange to me that 6% or 8% growth could put China into crisis mode, but from what I understand, this is in fact the case.

The reason for this curious phenomenon is the following: China is currently undergoing the largest mass migration in the history of the world.

In the next 25 years, 345 million people are going to move from the rural areas into the city areas, which is the biggest mass migration of people ever, anywhere," Guy Hollis, of international real estate agents Jones Lang LaSalle, told BBC World Service's Global Business programme.

Simply, China has to create jobs to give to the millions upon millions of peasants who are currently making their way from farming villages into the megalopolises that are springing up all over China.

If there are no jobs to give these displaced farmers, people throughout China will feel the effects. Life in the cities will deteriorate and the countryside will have to back in the peasants who tried to make it in the big city but failed.

Right now, China's economy seems to still be running on the inertia it's built up over the past several years. I'm not counting on China being able to maintain this though. Especially if the rest of the falls much farther than it already has as well.

I have to imagine that the boom times are coming to an end here in China though. There's no way it will stand alone while the rest of the world burns.

And if things do really get worse in the Middle Kingdom, I reckon that being a white American working and living in China would no longer guarantee decent employment like it does now.