China and the Case for Stimulus

A blog about business and economics.
Sept. 4 2012 8:15 AM

China and the Case for Stimulus

I would say that China over the past several years is a great real-world example of fiscal stimulus at work. So does Tyler Cowen, except he seems to see the Chinese experience as a debunking of stimulus.

But look at the numbers. In 2007, China's PPP-adjusted GDP per capita was $5,562. In 2008 it was $6,201. In 2009 it was $6,810. In 2010 it was $7,571. In 2011 it was $8,407. The 2012 growth numbers look certain to show a drastic slowing down of growth. But let's get really pessimistic about China and assume 0 percent growth across 2012 followed by a 5 percent contraction in real GDP per capita in 2013. That would still leave China's per capita GDP level about 50 percent higher than it was when the world starting going into recession. That seems to me like an enormous success story.


The big knock on the Chinese economy is that there's all this malinvestment and tons of white elephant projects. And perhaps there are. But there's no sector of the economy with lower productivity than the unemployment sector, and no public investment more wasteful than having a human being spend years scanning help-wanted ads and feeling depressed. Does someone seriously want to argue that none of these projects have any value? It doesn't seem to me that anyone in China is debating whether or not the typical household is better off than it was four years ago. Here in the USA we've had about 2 to 3 percent of our workforce persistently engaged in doing nothing for the past several years, and the forecasts all show that trend continuing for a while. That, to me, looks like intolerable waste.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.



More Than Scottish Pride

Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 

iOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.

Why Greenland’s “Dark Snow” Should Worry You

Three Talented Actresses in Three Terrible New Shows

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.


Happy Constitution Day!

Too bad it’s almost certainly unconstitutional.

What Charles Barkley Gets Wrong About Corporal Punishment and Black Culture

My Father Was James Brown. I Watched Him Beat My Mother. Then I Married Someone Like Him.

  News & Politics
Sept. 17 2014 12:02 PM Here It Is: The Flimsiest Campaign Attack Ad of 2014, Which Won’t Stop Running
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
The Vault
Sept. 17 2014 1:04 PM The War Department's WWII Advice Booklet for Soldiers Headed to Syria
  Double X
The XX Factor
Sept. 17 2014 1:26 PM Hey CBS, Rihanna Is Exactly Who I Want to See on My TV Before NFL Football Games
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
Brow Beat
Sept. 17 2014 1:01 PM A Rare, Very Unusual Interview With Michael Jackson, Animated
Future Tense
Sept. 17 2014 12:35 PM IOS 8 Comes Out Today. Do Not Put It on Your iPhone 4S.
  Health & Science
Bad Astronomy
Sept. 17 2014 11:18 AM A Bridge Across the Sky
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.