I would have tended to discount that too, but a very good post yesterday by Setser that I didn’t have the time to get to is that China appears unaffected by the progressing slowdown over here. We’ve had some low-growth quarters, and then that bizarre (was it 3Q? very high growth quarter, which makes the accounting seem suspect. China continues to superheat, partly due to imported inflation thanks to keeping the currency peg with the dollar.

Setser also argued that US weakness may not hurt and may even favor China short term, since it leads to a dollar fall and therefore a linked yuan fall relative to other currencies, resulting in increased competitiveness. But due to inflation pressures, that isn’t sustainable.

Still awake?

Regarding growth of China’s economy. I don’t see how the data of the 4th quarter would suggest that the problems in US won’t have such a big effect on global economy, or on China particularly. Consumer demand hadn’t slowed down so much yet in US. If the recession in US has just started in December or is just starting around this time why would it show up in China’s data of the 4th quarter already? Assuming these data are sufficiently reliable, anyway. I would think there will be some delay before a large decrease in demand in US has a significant effect on China’s GDP.