The world is looking at China to save it from depression, but China has built its export based economy on the backs of its rural population, which is too poor to absorb the industry’s output now that global demand has slumped.
Will China be the "growth pole" that will snatch the world from the jaws of depression? This question has become a favorite topic as the heroic American middle class consumer, weighed down by massive debt, ceases to be the key stimulus for global production.
Although China’s GDP growth rate fell to 6.1% in the first quarter — the lowest in almost a decade — optimists see "shoots of recovery" in a 30% surge in urban fixed-asset investment and a jump in industrial output in March. These indicators are proof, some say, that China’s stimulus program of $586 billion — which, in relation to GDP, is much larger proportionally than the Obama administration’s $787 billion package—is working. Read more