For almost any Western country, a prediction of 6.5 percent GDP growth would be a forecast worth celebrating.
However, China’s economy is not like other Western economies, and this prediction was emblematic of slowing growth that as recently as 2010 saw GDP growth at a rate of more than 10.5 percent.
But with the release of China’s most recent economic reports, its outlook is taking a turn for the better. BBC reports that “China’s economy grew at an annual rate of 6.9% between April and June.” This is in spite of “tough measures on the property sector and lenders” that were implemented to slow its housing bubble.
Not sharing in this success is the United States, whose economic forecast has tumbled in recent weeks as the economy continues to underperform. MarketWatch notes that in May, the Atlanta Fed was predicting growth as high as 4.3 percent GDP.
This rate, while below anything is China’s recent history, would have been the highest since Q3 2014 and far higher than 2017’s first quarter rate of 1.4 percent, according to the Bureau of Economic Analysis.
Forecasts, however, have turned far less favorable since May, with MarketWatch again reporting that the Atlanta Fed has revised their prediction all the way down to 2.4%, citing the fact that “retail sales fell 0.2% in June” as a large reason for this failure to meet expectations.
In contrast, the BBC report noted that Chinese retailers saw spending rise by 11 percent year over year.
While the U.S. economy functions differently than China’s still developing and manufacturing one, making it unlikely that American figures will ever reach those of China, it is the failure of America and success of China at meeting their respective projections that may be cause for worry.
It remains to be seen how America’s economic pivot to an “America first” policy, along with a willingness to challenge China economically over its relationship with North Korea, will affect the economic outlooks for both countries.
But for now, it would appear that it would be dangerous to underestimate a continually rising China.