China GDP to Grow 8.7% in 2011, Down From 10%, World Bank Says
http://www.businessweek.com/news/2011-01-13/china-gdp-to-grow-8-7-in-2011-down-from-10-world-bank-says.html

Summary

This article was written earlier this year back in January. It discusses about the prediction of China’s economy expansion to 8.7 percent in 2011 but still down from 10 percent compared to last year. As for 2012 China is predicted to grow only 8.4 percent says the Washington-based lender forecast. The World Bank also mentions the government will continue to limit increases in asset prices. It is said that the growth of China dropped due to the restrictions placed on overheating sectors such as housing and a tighter monetary policy. The bank’s chief economist for East Asia and the Pacific also says that China has a considerable wide range for more rate increases. A surprising inflation in China increased to 5.1 percent last year's November, the fastest acceleration in 28 months, by higher food costs.The bank expressed concerns about assets in the East Asia and Pacific region, including some of the largest economies like China, Indonesia, Thailand and Malaysia. Indonesia’s economy is forecast to grow 6.2 percent this year and 6.5 percent in 2012. Thailand is projected to grow 3.2 percent in 2011 after 7.5 percent growth last year, the bank said.


Connections

Chapter 6 discusses about how to explain equilibrium GDP, fiscal-policy changes necessary to reach equilibrium GDP as well as multiplier formulas to calculate changes in equilibrium GDP. However this article focuses mainly on the increase and decrease in GDP growth in China and some other large economies such as Indonesia, Thailand and Malaysia. The article states, "China’s growth will ease partly because of “the unwinding of fiscal stimulus, restrictions placed on overheating sectors,” such as housing, and a tighter monetary policy, the bank said in a report released yesterday." Which explains some of the reasons for the changes in China's growth. The textbook gives many examples of what may cause these changes to occur but these examples are more in general.

Reflection

The textbook gives a better example and explanation of what GDP is and makes it easier to understand the dicussion within the article. I for one did not know GDP can decrease and increase so dramatically and how important it is towards the economy. I also did not know some of the largest economies include countries sch as China, Indonesia, Thailand and Malaysia. I've always thought China's GDP was increasing each year because of all the products produced however, this article shows that China's GDP has been decreasing compared to the previous years. Overall, I've gained a better understanding of the importance of GDP within countries and the impact it has for it's economies.