Commentary

China’s Domestic Economy Continues to Grow

The Wall Street Journal reports (January 2, 2010) that China’s Purchasing Manager’s Index rose for the tenth straight month in December. I’ve blogged on China’s robust growth before, but the data reported in this article are quite telling about the future of the global economy once the recession ends. China’s new orders for manufacturing goods grew and imports. A sign of economic strength is strong demand for imports, since these goods and services fuel domestic demand.

Notably, exports fell during this period, suggesting China is less and less dependent on exports for its economic growth.

The index covers 11 components and reports results for more than 700 firms. The index also suggested that the fourth quarter of 2009 was the strongest since the world economy began to tank.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.