29/10/2004 1:29:46 pm
The Importance of China?s Economy. For the first time in nine years, China yesterday raised its interest rate. This is one attempt to cool down the booming economy; GDP grew with over 9 per cent the last quarter. Inflation is rising. The Financial Times today has a good analysis. This has sent shock waves through not only the stock markets in China but also the rest of the world. Everyone knows that the Chinese economy has to be cooled down, but it is still uncertain whether they will make a "soft landing" or a more tough one. Perhaps the most important conclusion of the events following this decision is that it illustrates the current importance of the Chinese economy. It has grown extremely strong for decades; it is now 650 per cent larger than in 1980. Predictions say that in a few more decades, it will be the second largest economy in the world. And in an open and interconnected world, what happens in China affects the lives of people in Sweden. There will be more of this as time goes by.